Reported by: Ijeoma G | Edited by: Oravbiere Osayomore Promise.
Nearly two decades after the Central Bank of Nigeria (CBN) revoked the licence of Gulf Bank Plc, the Nigeria Deposit Insurance Corporation (NDIC) has filed two separate lawsuits at the Federal High Court in Lagos against Wema Bank Plc, seeking the recovery of 12 high‑value properties in Banana Island, Lagos, and an alleged unauthorised payment of N401 million. The combined claim over the real estate alone is estimated at approximately N125.38 billion. The NDIC, acting as the liquidator of the failed Gulf Bank under the Failed Banks (Recovery of Debts and Financial Malpractices in Banks) Act, alleges that Wema Bank unlawfully took custody of and later disposed of the properties, which the corporation says were beneficially owned by the defunct bank.
The dispute is rooted in the collapse of Gulf Bank, whose licence was revoked by the CBN on January 16, 2006, following insolvency and failure to meet capitalisation requirements. A Federal High Court winding‑up order on November 27, 2006, formally appointed the NDIC as liquidator, tasking it with recovering the bank’s assets for the benefit of depositors and creditors. However, the NDIC alleges that valuable assets were stripped from the failed bank before and after its collapse, with Wema Bank at the centre of the alleged asset diversion.
At the heart of the first suit are six prime plots in Banana Island. According to court filings, these properties, located in Zones J, K, L and P, cover approximately 13,794.145 square metres. The NDIC values them at N62.07 billion, based on a current market rate of N4.5 million per square metre. The agency alleges that these plots were acquired between 1998 and 2003 by a shell company, Euston Wenberg Engineering Company Limited, which was used as a vehicle by Gulf Bank. Although Gulf Bank’s internal records treated the acquisition as a loan account, the NDIC insists the assets are beneficially owned by the defunct bank.
The NDIC further alleges that Wema Bank took custody of these six properties as purported security for an interbank deposit of N771.79 million. However, a joint special examination conducted by the CBN and NDIC in September 2005 found no record of any such deposit in Gulf Bank’s books. The examination report deemed the defunct bank’s explanations unsatisfactory, and no supporting documentation was ever produced. The NDIC also points to two managers’ cheques, totalling N250 million, issued by Access Bank and the defunct Intercontinental Bank in September 2005 in favour of Euston Wenberg Engineering. The corporation argues that these cheques represent a sale, not a legitimate debt recovery, and that the amount was grossly undervalued; a single Banana Island property at the time was worth more than N500 million.
The second suit focuses on another six properties in Banana Island, which the NDIC says were acquired through Bacad Finance and Investment Limited (later renamed Supra Commercials Limited), an entity in which Gulf Bank held over 80 percent of the shares. Court documents show that Gulf Bank injected N20 million into Bacad Finance in 2001 and a further N60 million in 2003, using the funds to acquire additional plots covering about 13,979.974 square metres. These properties are now valued at N62.9 billion. The NDIC alleges that Gulf Bank had planned to develop the land into a luxury 72‑flat residential estate, to be called Bacad Estate, in partnership with Shelter Afrique, before its collapse.
The NDIC accuses Wema Bank of taking possession of these six properties without any valid mortgage, court order, or proprietary interest. The corporation further alleges that Wema Bank claimed to have sold the assets for N524 million through managers’ cheques issued in 2006 and 2007. The NDIC rejects this figure as grossly implausible, insisting that each property was worth over N4 billion at the time of the alleged sale.
Beyond the property dispute, the NDIC is also challenging a N401 million payment it says was unlawfully collected by Wema Bank from United Bank for Africa (UBA), which was acting as the NDIC’s agent bank. According to the corporation, an earlier approval had limited Wema Bank’s entitlement from Gulf Bank’s liquidation proceeds to just N1.635 million.
In its reliefs before the court, the NDIC is seeking a declaration that the alleged disposal of the assets was illegal and is asking the court to compel Wema Bank to either return the title documents or pay the current market value of the properties. The corporation is also demanding the repayment of the disputed N401 million.
The NDIC has assembled a team of senior lawyers and former security officials to support its case. The investigation was supervised by senior lawyers Dada Awosika (SAN) and Pekun Sowole, retired Deputy Inspector‑General of Police Abiodun Alabi, and the former head of the NDIC’s Criminal Investigation Unit, Joseph Okolonji. The corporation has also referred the case to the Economic and Financial Crimes Commission (EFCC) for further investigation.
For its part, Wema Bank has challenged the jurisdiction of the Federal High Court to hear the matter. The bank argues that the dispute is fundamentally one of property ownership rather than banking debt recovery, placing it outside the court’s jurisdiction under the Failed Banks Act. Wema Bank also contends that the claims are statute‑barred under the Limitation Law of Lagos State.
The court is expected to determine key issues surrounding asset ownership, the scope of the NDIC’s liquidation powers, limitation laws, and the legality of the disputed transactions. The case has been adjourned to June 25, 2026, for further proceedings.
The outcome of this high‑stakes legal battle could have significant implications for asset recovery in Nigeria’s banking sector. If the NDIC succeeds, it would affirm the corporation’s ability to trace and recover assets long after a bank’s collapse, potentially opening the door to further recoveries from other failed banks. If Wema Bank prevails, it could limit the NDIC’s powers in cases involving property ownership disputes and reinforce the importance of limitation periods in asset recovery.
Nearly two decades after Gulf Bank’s licence was revoked, the chase for its hidden wealth has entered a decisive phase, with the Federal High Court now set to determine whether 12 of Lagos’s most expensive properties will be returned to the nation’s deposit insurer or remain in the hands of a rival bank.
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