Nigerian billionaire Femi Otedola and Zenith Bank have reached an out-of-court settlement. Otedola and Zenith Bank have been embroiled in a heated dispute with the Nigerian mogul accusing the lender of fraud.
Recent court documents however show that Otedola and Zenith have resolved to withdraw from court. The Federal High Court of Nigeria, Lagos Division dismissed the case on June 13 after receiving a notice of discontinuance from the plaintiffs.
Why did Femi Otedola sue Zenith Bank?
The legal battle began when Otedola and his companies, Zenon Petroleum and Gas Limited, Seaforce Shipping Co. Limited, Luzon Oil and Gas Limited, and Garment Care, filed a lawsuit against Zenith Bank and other defendants, including Quantum Zenith Securities and Investment Limited, Veritas Registrars Limited, and Central Securities Clearing System Plc.
In the suit lodged on March 12, the tycoon accused Zenith Bank of disposing of his shares in the bank without authorisation, manipulating the companies’ bank accounts and fabricating some documents to conceal the alleged crimes.
Otedola claimed that the lender wrongfully calculated his debts and sold them to the Asset Management Corporation of Nigeria (AMCON). AMCON was established to buy non-performing loans from banks with the intention of recovering them.
He argued that the letters of credit, which led to the bad loans acquired by AMCON, were opened before the corporation took over the debt in December 2011.
The mogul also claimed that the overdue amount on Zenon’s account at the point AMCON took over was N39 billion( $26 million) However, Zenith Bank offered the debt to AMCON at N49 billion($32 million), with AMCON eventually paying N44.1 billion ($29.5 million).
Moreover, Zenon claimed that Zenith Bank wrongfully debited N205 million($137,000) from its account. (The bank has now agreed to refund this amount with interest).
Other charges against Zenith Bank
Similarly, Seaforce Shipping also owned by Otedola accused Zenith Bank of falsely claiming it owed N5.9 billion($3.9 million) as of February 2024. The lender dropped this claim after Seaforce proved that the account was in credit as of 2018.
Additionally, it was revealed that Zenith Bank sold 415 million shares held by Zenon for N4.9 billion($3.2 million) in December 2010, repurchasing them the following month for N5.4 billion($3.6 million), resulting in a net loss of N142.9 million($95,700).
Several other unauthorised and suspicious transactions on Otedola’s account led to a combined loss of N205.4 million($137,559). Sources claim that initially, Otedola tried in futility to resolve the issue out of court ultimately forcing him to take legal action against the lender.
“It is clear that Zenith Bank Plc is not sincere in resolving this issue out of court and as such a time-wasting exercise,” a source told the Premium Times in May 2024.
