Femi Otedola Resolves Dispute with Zenith Bank Out of Court

Femi Otedola 

Femi Otedola chooses to settle out-of-court with Zenith Bank for fraudulent activity on the accounts of his business.

Femi Otedola settles out-of-court with Zenith Bank over fraudulent activity on his business accounts, ending a legal battle that began in March. The settlement includes reimbursement for a mistakenly debited N205 million, plus compound interest.

Femi Otedola, the chairman of FBN Holdings and the main stakeholder of Geregu Plc, has chosen to settle Zenith Bank Plc out-of-court together with a few of his firms.

Otedola and the bank were embroiled in a court battle because of alleged fraudulent activity on the accounts of his business.

According to court documents, Otedola and his businesses filed a lawsuit against the lender at the Federal High Court of Nigeria, Lagos Division, on March 12. The case was dropped on Thursday, June 13, after the plaintiffs sent a notice of discontinuance.

The plaintiffs in this case were Zenith Bank, Quantum Zenith Securities & Investment Limited, Veritas Registrars Limited, Central Securities Clearing System Plc, and Zenon Petroleum & Gas Limited, Seaforce Shipping Co. Limited, Luzon Oil & Gas Limited, Garment Care, and Otedola.

A court record states that Justice A.O. Faji dismissed the action following requests for its dismissal by the attorneys representing the first through third defendants, the plaintiffs, and the fourth defendant, who did not raise any objections.

Zenon has maintained that the credit letters that preceded AMCON's problematic loans were initiated prior to the company taking over the debt in December 2011. Following AMCON's action, the account was no longer operated by the corporation.

A document that summarizes the discussions between the parties at a meeting on May 20th states that Zenith Bank consented to reimburse Zenon for the N205 million that it had mistakenly debited to his account using a bankdraft, along with compound interest.

Otedola decided to sue the bank in May, according to people with knowledge of the situation, following multiple attempts at reconciliation that ended in failure. Each party held three meetings during the month, but none produced the intended outcomes.

 

“It is clear that Zenith Bank Plc is not sincere in resolving this issue out of court and as such a time-wasting exercise,” one of the sources said.

“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 wealthy tycoon's company, Seaforce Shipping Company Limited, claimed that Zenith Bank had sent it some statements of account stating that, as of February 2024, it owed the bank N5.9 billion. It further stated that Zenith Bank dropped the lawsuit when the business provided evidence that Seaforce's account was in good standing as of 2018.

According to a source, Zenith Bank sold Zenon's 415 million shares for N4.9 billion in December 2010, however the shares were then repurchased for N5.4 billion, which led to

According to a source, in December 2010, Zenith Bank sold the 415 million shares that Zenon had for N4.9 billion. However, the shares were then repurchased for N5.4 billion, resulting in a N142.9 million net loss.

He further revealed that Otedola's account was used for related transactions, which resulted in a net loss of N61.5 million and a total loss of N205.4 million in both situations.

On May 16, Isyaku Mohammed, the force criminal investigation department's commissioner of police in charge of administration, called the managing director of Zenith Bank to discuss what he claimed to be an unauthorized debit from Zenon's account.

“This office is investigating an alleged case of fraudulent misrepresentation, wrongful debit and unauthorised transactions referred from the assistant inspector general of police, FCID Annex, Alagbon Close, Ikoyi, Lagos, involving your financial institution,” the letter to the bank MD stated.

“A precis of the petition at disposal reveals that sometime in 2011, an unauthorised withdrawal was carried out on the account of Zenon Petroleum Gas Limited with number 10110385211 to the tune of Two Hundred and Five Million, Three Hundred and Forty-six Thousand, Five Hundred and Seventy-Three Naira (N205,346,573.00) without justification.”

The letter stated that when AMCON purchased the debt in 2011, Zenith Bank improperly opened a few letters of credit, which resulted in an unauthorized loan disbursement that increased Zenon's debt.