Wema Bank Plc has dismissed as false and misleading recent reports alleging impropriety in the sale of certain Banana Island properties linked to the defunct Gulf Bank Plc, insisting that its actions were lawful recovery efforts tied to a long-standing debt obligation.
The bank said in a notice to the NGX seen by THE WHISTLER that the publications contained “false, misleading, and wholly unsubstantiated allegations” intended to distort the facts surrounding the transactions and undermine the bank’s reputation.
According to Wema Bank, the matter originated from an inter-bank placement granted to Gulf Bank Plc in 2002 valued at N4.6bn. The bank explained that by August 2004, the exposure had been reduced to approximately N1.2bn before the remaining obligation became delinquent.
The bank stated that in an effort to recover depositors’ and shareholders’ funds, it initiated lawful recovery processes that later became part of a criminal investigation involving the former Managing Director of Gulf Bank Plc by the Economic and Financial Crimes Commission (EFCC).
Wema Bank disclosed that investigations conducted by the EFCC revealed that the diverted funds were allegedly used to acquire properties in Banana Island, Lagos, through two companies, Bacad Finance & Investment Company Ltd, now known as Supra Commercial Trust Limited, and Euston Wenberg Eng Ltd.
The bank emphasized that both companies were separate legal entities and not the same as Gulf Bank Plc, stressing that neither company fell under the supervisory jurisdiction of the Nigeria Deposit Insurance Corporation (NDIC).
According to the statement, EFCC’s asset-tracing investigations uncovered what the bank described as “significant underlying fraud on a substantial scale.” Following the investigation, the two companies reportedly relinquished their proprietary interests in the Banana Island properties as part of efforts to settle Gulf Bank’s indebtedness to Wema Bank.
Wema Bank further stated that the NDIC formally acknowledged the indebtedness of the defunct Gulf Bank in separate letters dated September 26, 2007, and June 10, 2009. The letters, addressed respectively to the Federal Land Registry and Wema Bank Plc, were said to have affirmed the validity of the bank’s claims and interests over the disputed properties.
The bank added that the same documents had been tendered by NDIC’s counsel, Dr. Dada Awosika (SAN), in ongoing proceedings before Justice Allagoa of the Federal High Court in Lagos.
In addition, Wema Bank disclosed that after the sale of the properties, the NDIC paid the outstanding shortfall owed to the bank, a development it said demonstrated the corporation’s awareness and acknowledgment of the transaction and recovery arrangement.
The lender argued that the combined effect of the property relinquishment, NDIC’s written acknowledgment of the debt, and the subsequent payment of the outstanding balance reinforced the legitimacy of its recovery efforts and weakened any attempt to challenge the transactions.
While confirming that the NDIC has recently instituted two separate legal actions against the bank at the Federal High Court, Lagos, purportedly in its capacity as liquidator of Gulf Bank Plc, Wema Bank maintained that the lawsuits do not alter the material facts of the case.
The bank noted that, as the matters are currently before the court, it would refrain from making further comments on issues subject to judicial determination. However, it assured stakeholders that it would vigorously defend its interests through all lawful means available.
Wema Bank reaffirmed its commitment to corporate governance, transparency, regulatory compliance, and ethical banking practices, assuring shareholders, customers, regulators, and the public of its continued dedication to responsible and lawful operations.
“The Bank will continue to exert its rights and will not succumb to the shenanigans of unscrupulous individuals who want to reap where they did not sow,” the notce added.
