By AYOOLA OLAOLUWA
Fresh controversy has erupted between Wema Bank and the Nigeria Deposit Insurance Corporation (NDIC) over the ownership and control of several disputed properties in Lagos’ upscale Banana Island, with both parties exchanging sharp accusations over the high-value assets.
The dispute escalated after the NDIC laid claim to the property as part of assets linked to a failed financial institution under liquidation, a position strongly rejected by Wema Bank.
In a blistering response at the weekend, the bank described the corporation’s claims as “misleading, malicious and damaging”, insisting that its interest in the properties was lawfully acquired and fully backed by valid legal and financial documentation.
The dispute broke into the open on Friday, May 15, 2025, when NDIC, acting as liquidator of the defunct Gulf Bank Plc, instituted two separate suits against Wema Bank Plc at the Federal High Court in Lagos over disputed Banana Island properties valued at more than N125.3 billion and an alleged unauthorized N401 million transaction.
According to court filings seen by Business Hallmark, the disputed assets involved 12 high-value properties in Banana Island allegedly acquired through companies linked to Gulf Bank before the bank’s liquidation in 2006.
NDIC claimed the properties remained beneficial assets of the defunct bank and should form part of the liquidation process for the benefit of depositors and creditors.
In the first suit, NDIC is seeking recovery of six properties allegedly acquired through Euston Wenberg Engineering Company Limited, while the second action concerns another six properties linked to Bacad Finance and Investment Limited, currently known as Supra Commercials Limited.
The NDIC further alleged that Wema Bank unlawfully took custody of the properties and disposed of them at values far below their market worth, despite lacking any valid mortgage, court order, or legal interest in the assets.
NDIC also accused the bank of collecting N401 million from UBA in 2009 without lawful authorization, maintaining that only N1.635 million had been approved as the outstanding balance due to Wema Bank following Gulf Bank’s collapse.
The suits, filed under the Failed Banks (Recovery of Debts and Financial Malpractices in Banks) Act, seek declarations voiding the alleged sales, recovery of the assets or their current market value, and repayment of the disputed funds.
The court is expected to determine key issues surrounding asset ownership, banking liquidation powers, limitation laws, and the legality of the disputed transactions. The matter has been adjourned to June 25, 2026, for further proceedings.
In its response, Wema Bank dismissed allegations surrounding the sale of the Banana Island properties allegedly linked to the defunct Gulf Bank Plc, describing recent publications on the matter as false, misleading and malicious.
In a statement issued over the weekend, the bank said the reports were aimed at distorting facts relating to transactions connected to the recovery of debts owed by the defunct Gulf Bank Plc.
According to Wema Bank, the issue dates back to 2002 when it made an inter-bank placement of N4.6 billion with Gulf Bank.
The bank explained that by August 2004, the outstanding exposure had reduced to about N1.2 billion before the obligation became delinquent.
The bank stated that efforts to recover depositors’ and shareholders’ funds later resulted in criminal investigations involving the former managing director of Gulf Bank by the Economic and Financial Crimes Commission (EFCC).
Wema Bank said investigations 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 Engineering Limited.
The bank stressed that both companies were separate legal entities and not subsidiaries or equivalents of Gulf Bank Plc, adding that they were not under the supervision of NDIC.
According to the statement, the two firms voluntarily relinquished their interests in the Banana Island properties as part of arrangements to settle Gulf Bank’s indebtedness to Wema Bank following findings from the EFCC’s asset-tracing investigations.
Wema Bank further disclosed that the NDIC had formally acknowledged Gulf Bank’s indebtedness through letters dated September 26, 2007, and June 10, 2009, addressed to the Federal Land Registry and Wema Bank respectively.
The bank said the documents were among materials already tendered before the Federal High Court in Lagos in an ongoing legal dispute.Insurance
The financial institution also claimed that after the sale of the disputed properties, the NDIC paid the outstanding shortfall owed to Wema Bank, arguing that such action demonstrated the corporation’s awareness and recognition of the transaction.
“In light of the foregoing, NDIC is precluded from and cannot in good faith contest the relinquishment of those interests or the appropriateness of Wema Bank’s recovery efforts”, the bank stated.
While acknowledging that the NDIC had instituted two separate suits against the bank at the Federal High Court in Lagos in its capacity as liquidator of Gulf Bank Plc, Wema Bank said the matters were now sub judice and declined further comments on issues pending before the court.
The bank vowed to deploy all legal means necessary to defend its rights and interests.
Our correspondent reliably gathered that Wema Bank has challenged the jurisdiction of the Federal High Court to handle the two suits instituted against it by the NDIC.
The bank in a counter claim it filled at the Federal High Court, Lagos, claimed the dispute relates to property ownership rather than banking debt recovery and that the claims are statute-barred under the Limitation Law of Lagos State.
Meanwhile, the public feud between the two entities has triggered fresh concerns within the banking and financial sectors over lingering asset recovery disputes involving failed banks, with analysts warning that prolonged legal battles between major financial institutions and regulators could undermine investor confidence and further complicate the resolution of distressed assets in Nigeria’s banking industry