The Nigeria Deposit Insurance Corporation (NDIC), acting as liquidator of the defunct Gulf Bank Plc, has instituted two separate lawsuits against Wema Bank at the Federal High Court in Lagos over disputed assets and alleged financial irregularities involving Banana Island properties valued at approximately N125.38 billion and an additional N401 million payment.
The suits, filed under the Failed Banks (Recovery of Debts) and Financial Malpractices in Banks Act, seek recovery of high-value properties in Banana Island as well as clarification and reversal of allegedly unauthorised financial transactions linked to the collapsed Gulf Bank.
NDIC stated that the disputed assets include 12 luxury properties allegedly connected to Gulf Bank before its licence was revoked by the Central Bank of Nigeria in January 2006 due to insolvency.
The corporation is asking the court to declare the disposal of the properties illegal and compel Wema Bank to return the relevant title documents or pay their current market value.
It also challenged an alleged N401 million transaction said to have been received by Wema Bank through the United Bank for Africa, arguing that the payment lacked proper authorisation during the liquidation process.
According to NDIC, investigations revealed that the properties were linked to companies associated with Gulf Bank prior to its collapse, and no valid banking documentation supported claims that the assets were lawfully transferred.
A former NDIC investigator told the court that the properties may have been undervalued and improperly disposed of, despite their significant market worth in Banana Island.
NDIC further disputed claims of an interbank deposit allegedly used to justify Wema Bank’s involvement, stating that regulatory examinations found no evidence of such funds in Gulf Bank’s records.
In a second related suit, NDIC also questioned ownership of another set of Banana Island properties allegedly linked to Bacad Finance and Investment Limited, later renamed Supra Commercials Limited, in which Gulf Bank reportedly held majority shares.
The corporation alleged that the assets were later transferred and partially sold for far below their estimated value, with additional disputed payments collected years after the bank’s collapse.
NDIC has referred parts of the matter to law enforcement agencies for further investigation and indicated plans to call financial experts and retired security officials as witnesses.
Wema Bank, however, has challenged the court’s jurisdiction, arguing that there is no debtor-creditor relationship between both parties and that the case falls outside the scope of the Failed Banks Act. The bank is seeking dismissal of the suits on legal grounds.
The case has been adjourned for further hearing.
Nigeria Deposit Insurance Corporation
Wema Bank
Gulf Bank Plc
Central Bank of Nigeria
Banana Island
Economic and Financial Crimes Commission
