By JKNewsMedia
QUESTIONS OVER legacy transactions involving defunct Gulf Bank Plc (GBPlc) moved to the forefront after Wema Bank Plc (WBPlc) rejected what it described as false, misleading and unsubstantiated allegations surrounding the sale of Banana Island properties allegedly linked to the defunct bank.
JKNewsMedia.com reports that WBPlc stated in an unsigned press release issued to the media that it made an inter-bank placement with GBPlc in 2002 valued at N4.6 billion, adding that the exposure had reduced to about N1.2 billion by August 2004 before the outstanding obligation became delinquent.
WBPlc also stated that its recovery efforts later aligned with a criminal investigation involving the former Managing Director of GBPlc.
According to the bank, investigations by the Economic and Financial Crimes Commission (EFCC) found that the funds were diverted and used to acquire properties in Banana Island, Lagos, through Bacad Finance and Investment Company Ltd, now known as Supra Commercial Trust Limited, and Euston Wenberg Eng Ltd.
WBPlc also clarified that Bacad Finance and Investment Company Ltd, Supra Commercial Trust Limited and Euston Wenberg Eng Ltd were separate entities distinct from GBPlc and not subject to the supervision of the Nigeria Deposit Insurance Corporation.
It further adds that the EFCC asset tracing exercises uncovered what it described as significant underlying fraud on a substantial scale.
Following the findings, the WBPlc said Bacad Finance and Investment Company Ltd and Euston Wenberg Eng Ltd voluntarily relinquished their proprietary interests in the Banana Island properties towards the settlement of GBPlc indebtedness to WBplc, and adds that the NDIC admitted Gulf Bank’s indebtedness to Wema Bank in letters dated September 26, 2007 addressed to the Federal Land Registry and June 10, 2009 addressed directly to WBPlc.
According to the bank, the letters recognised the validity of its claim against Gulf Bank and its interest in the properties, stating that both documents formed part of materials filed in court by NDIC counsel Dr Dada Awosika SAN in proceedings before Justice Allagoa of the Federal High Court in Lagos.
In addition, WBPlc stated that after the properties were sold, the NDIC paid the shortfall owed to the bank and insisted that the payment demonstrated that the NDIC was aware of the transaction and participated in settling the outstanding balance following the sale.
It also stressed that the voluntary relinquishment of the properties by Bacad Finance and Investment Company Ltd and Euston Wenberg Eng Ltd, the NDIC’s admission of Gulf Bank’s indebtedness and the payment of the shortfall established the legitimacy of its recovery efforts.
WBPlc then acknowledged that the NDIC had commenced two separate actions against the bank at the Federal High Court in Lagos in its capacity as liquidator of GBPlc; again, stressing that the matters were before the court and sub-judice, and added that it would refrain from further comments on issues for judicial determination.
The bank stated that it would contest the suits and pursue all legal and legitimate means to protect its rights and interests while reaffirming its commitment to corporate governance, regulatory compliance and transparency, adding that it would continue to act lawfully and responsibly in the interests of stakeholders.
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