NDIC Sues Wema Bank Over ₦125.38bn Banana Island Asset Dispute

According to Ireporter Online, the Nigeria Deposit Insurance Corporation (NDIC) has instituted two separate actions against Wema Bank at the Federal High Court in Lagos, seeking the recovery of assets valued at over ₦125.38 billion allegedly linked to the defunct Gulf Bank Plc.

The suits, filed under the Failed Banks (Recovery of Debts and Financial Malpractices in Banks) Act, are part of NDIC’s ongoing efforts to wind up and recover remaining assets of the collapsed financial institution nearly two decades after its operating licence was withdrawn.

At the centre of the dispute are 12 prime properties located in Banana Island, Lagos, alongside an alleged unauthorised payment of ₦401 million.

In the first case, NDIC is asking the court to compel the recovery of six plots in Banana Island, which it said were acquired between 1998 and 2003 through Euston Wenberg Engineering Company Limited, described by the corporation as a shell entity allegedly used by Gulf Bank. The plots, spanning Zones J, K, L and P and covering about 13,794.145 square metres, are valued by NDIC at approximately ₦62.07 billion based on prevailing market rates.

The corporation further alleged that the properties later came under Wema Bank’s custody as security for an interbank deposit of ₦771.79 million. However, NDIC maintained that a joint examination by the Central Bank of Nigeria and NDIC in 2005 found no evidence of such a deposit in Gulf Bank’s records. It also alleged that Wema Bank produced managers’ cheques worth ₦250 million, suggesting a transaction that resembled a property purchase rather than deposit recovery.

In a separate suit, NDIC is also contesting another set of six Banana Island properties allegedly acquired through Bacad Finance and Investment Limited, later known as Supra Commercials Limited. The corporation claimed Gulf Bank invested heavily in the company and eventually gained controlling interest, but that the assets were later taken over and sold by Wema Bank without valid legal authority. NDIC valued the properties at over ₦4 billion each at the time of disposal, insisting they were sold for a grossly undervalued ₦524 million.

NDIC is also seeking recovery of an additional ₦401 million, which it alleges was improperly collected by Wema Bank from United Bank for Africa in 2009, despite earlier settlements indicating no further outstanding obligations.

The corporation is asking the court to declare the transactions null and void, order restitution of the current value of the assets within 30 days of judgment, or alternatively compel the return of the original Certificates of Occupancy. It also seeks the committal of senior bank executives should there be any failure to comply with court orders.

Wema Bank, however, has challenged the suits, arguing that the Federal High Court lacks jurisdiction. The bank maintains that the dispute does not stem from any loan or credit facility as required under the Failed Banks Act and insists there is no debtor-creditor relationship between both parties. It further argued that the claims are time-barred under Lagos State limitation laws and involve assets belonging to distinct corporate entities.

The court is expected to rule on the jurisdictional objections and other preliminary issues when proceedings resume on 25 June 2026.