Wema Bank Banana Island claims controversy deepens as the bank rejects allegations over Gulf Bank-linked property sales

Wema Bank Plc has dismissed what it described as false and malicious allegations surrounding the sale of certain Banana Island properties allegedly connected to the defunct Gulf Bank Plc, insisting that its recovery actions were lawful and properly documented.

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In a statement issued on Friday, Wema Bank Plc said recent media reports misrepresented the facts relating to the disputed properties and failed to acknowledge the bank’s longstanding efforts to recover funds owed by the now-defunct lender.

The bank explained that the dispute originated from an inter-bank placement of ₦4.6 billion granted to Gulf Bank Plc in 2002.

According to the statement, the exposure was reduced to about ₦1.2 billion by August 2004 before the outstanding balance became delinquent.

Wema Bank Plc said recovery efforts later aligned with investigations by the Economic and Financial Crimes Commission, which allegedly discovered that diverted funds had been used to acquire properties in Banana Island, Lagos, through Bacad Finance & Investment Company Ltd, now known as Supra Commercial Trust Limited, and Euston Wenberg Eng Ltd.

The bank stressed that the two companies were legally distinct from Gulf Bank Plc and were not under the supervision of the Nigeria Deposit Insurance Corporation.

In what the bank described as a critical development, the companies allegedly relinquished their proprietary interests in the properties as part of efforts to settle Gulf Bank’s indebtedness to Wema Bank.

The statement further disclosed that the Nigeria Deposit Insurance Corporation formally acknowledged Gulf Bank’s indebtedness to the bank in letters dated September 26, 2007 and June 10, 2009.

According to Wema Bank, the letters were addressed respectively to the Federal Land Registry and the bank itself, and have since been submitted as part of court filings in ongoing proceedings before Justice Allagoa of the Federal High Court in Lagos.

The bank also stated that the NDIC later paid the outstanding shortfall after the sale of the properties, arguing that the development demonstrated the corporation’s awareness and participation in resolving the debt obligation.

Wema Bank Plc maintained that the NDIC could not reasonably challenge the relinquishment of the properties or the bank’s recovery process after previously recognising the indebtedness and settling the balance.

The lender, however, confirmed that the Nigeria Deposit Insurance Corporation had initiated two separate legal actions against the bank at the Federal High Court in Lagos in its capacity as liquidator of Gulf Bank.

While describing the matters as sub judice, the bank said it would continue to defend its position through all lawful means.

The statement reaffirmed the bank’s commitment to robust corporate governance, transparency and regulatory compliance, while accusing unnamed individuals of attempting to distort facts surrounding the transaction.

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The bank also highlighted its reputation as the operator of ALAT, described as Africa’s first fully digital bank, and reiterated its pledge to protect the interests of shareholders, customers and regulators.