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Two lawsuits filed at Federal High Court, Lagos, accuse Wema Bank of selling luxury assets without authorization nearly two decades after Gulf Bank’s collapse.
The Nigeria Deposit Insurance Corporation (NDIC), acting as liquidator of the defunct Gulf Bank Plc, has filed two lawsuits against Wema Bank Plc at the Federal High Court in Lagos. The legal action concerns 12 luxury properties in the upscale Banana Island area of Lagos, valued at N125.38 billion.
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The suits, brought under the Failed Banks (Recovery of Debts and Financial Malpractices in Banks) Act, are part of the NDIC’s ongoing efforts to recover assets tied to Gulf Bank nearly 20 years after its liquidation.
Background of the Dispute
According to court filings, the properties were acquired between 1998 and 2003. The NDIC alleges that Wema Bank took custody of and sold the assets in 2006 and 2007 at a price far below their true market value.
The first lawsuit focuses on six properties in Zones J, K, L, and P of Banana Island, covering approximately 13,794.145 square metres. The NDIC values these assets at N62.07 billion, based on a market rate of N4.5 million per square metre.
The corporation claims the properties were originally acquired by Euston Wenberg Engineering Company Limited—described as a shell company allegedly linked to Gulf Bank.
Key Allegations Against Wema Bank
The NDIC has raised several serious allegations in its court filings:
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Unauthorized possession and sale: The corporation claims Wema Bank took control of the properties without any valid mortgage, court order, or ownership claim.
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Grossly undervalued transaction: Wema Bank reportedly sold the assets for just N524 million via managers’ cheques issued in 2006 and 2007. The NDIC insists each property was worth over N4 billion at the time of sale.
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Unlawful payment collection: The agency also alleges that Wema Bank illegally collected N401 million from the United Bank for Africa (UBA) Plc in September 2009. This payment exceeded an earlier approval that limited Wema Bank’s entitlement to just N1.635 million from Gulf Bank’s liquidation proceeds.
NDIC’s Legal Reliefs and Investigation
Before the court, the NDIC is seeking several remedies:
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Nullification of the alleged property transactions.
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Return of all title documents to the properties.
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Payment of the current market value of the assets.
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Refund of the disputed N401 million.
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Sanctions against Wema Bank’s executives for any non-compliance with court orders.
The corporation has also disclosed that its investigation was supported by senior lawyers and retired security officials, including Dada Awosika (SAN), Pekun Sowole, retired Deputy Inspector-General of Police Abiodun Alabi, and former head of the NDIC’s Criminal Investigation Unit, J.I. Okolonji. The case has additionally been referred to the Economic and Financial Crimes Commission (EFCC) for further investigation.
Wema Bank’s Defence
Wema Bank has asked the court to dismiss both suits. The bank argues that the Federal High Court lacks jurisdiction to hear the matter, insisting the dispute is about land ownership, not debt recovery.
The bank also contends that the claims are statute-barred, noting that the disputed transactions occurred nearly 20 years ago, between 2006 and 2007.
Next Court Hearing
The case has been adjourned to June 25, 2026, for the court to hear arguments on Wema Bank’s jurisdictional objections and other preliminary issues.
