Femi Otedola, chairman of FBN Holdings and principal owner of Geregu Power, has levelled serious accusations against Zenith Bank, alleging fraud and mismanagement in dealings involving his former company, Zenon Petroleum & Gas, and other related firms, according to a report by Premium Times.
The conflict centres on a controversial debt issue, with Mr. Otedola claiming that Zenith Bank engaged in fraudulent activities, including the improper disposal of his shares, manipulation of bank accounts, and the forging of documents to obscure their actions.
According to Premium Times, this disagreement has escalated to the point where there is now police investigation and litigation, as well as involvement from the Force Criminal Investigation Department (FCID).
Roots of the Dispute
The friction between Mr. Otedola and Zenith Bank originated from claims of dishonest accounting in the calculation of his liabilities before the bank sold his multibillion-naira debt to the Asset Management Corporation of Nigeria (AMCON).
AMCON, a government entity, acquires non-performing loans from banks to manage and recover them.
According to sources cited by Premium Times, Mr. Otedola sought judicial intervention and police involvement after failing to resolve the dispute through other means.
Technical teams from Zenith Bank and Zenon Oil convened on May 20, 2024, to address the issue, but the meeting ended without resolution.
A subsequent meeting at the Lagos Oriental Hotel also failed to resolve the matter, leading to threats of new legal action from Zenon Oil.
Billionaire Femi Otedola Alleges Zenith Bank Fraud in ongoing Legal Dispute
Legal and Financial Maneuvers
According to the Premium Tims report, this latest meeting is the third reconciliation attempt between the parties this month, all of which have been unsuccessful.
Premium Times also quoted an undisclosed source which questioned the sincerity of the bank.
“It is clear that Zenith Bank Plc is not sincere in resolving this issue out of court and that this is a time-wasting exercise. At this juncture, we have resolved to pursue our claims via the judiciary, law enforcement, the CBN, and the court of public opinion, as we know that our claims are very genuine.”
The report stated that Zenon claims that letters of credit, which led to the problematic loan acquired by AMCON, were opened before AMCON bought the debt in December 2011.
Zenon ceased operating the account once the takeover occurred.
The report also cites Zenon as stating that Zenith Bank “admitted” in meetings that it controversially opened letters of credit after AMCON procured the debt, a practice deemed unprofessional by Zenon.
Documents seen by Premium Times listed the overdue amount on Zenon’s account at the time of AMCON’s intervention as N39 billion.
However, Zenon asserts that Zenith Bank offered the debt to AMCON for N49 billion. After negotiations, AMCON paid Zenith Bank N44.1 billion for the bad debt.
What they are saying
Sunday Enebeli-Uzor, head of Zenith Bank’s corporate communications unit, did not respond to a request for comment, according to Premium Times.
Nairametrics also reached out to a top official of the bank’s corporate communications team, who confirmed the knowledge of the matter but stated that it was already sub-judice and, as such, will not be responding to the allegations.
Nairametrics also reached out to Mr. Otedola, who confirmed his dispute with Zenith Bank and also stated that the matter was in court and also being resolved outside court, declining to provide further details.
Zenith Bank recently appointed Dr. Adaora Umeoji as the Group Managing Director and Chief Executive of Zenith Bank Plc, replacing Dr. Ebenezer Onyeagwu. Nairametrics understands the latter was handling the case and had been summoned by the police to respond to the allegations.
Umeoji resumed office this week as the MD/CEO of the bank and will likely have this matter as one to address as she leads the bank to its next phase of growth.
Zenith Bank shares closed at N33 on Thursday, down 1.5%. The stock is currently 14.6% year to date.