Femi Otedola, chairman of FBN Holdings and major shareholder of Geregu Plc, along with several of his companies, have opted to settle their legal dispute with Zenith Bank Plc out of court.
Premium Times reports that Federal High Court, Lagos Division, dismissed the case following a notice of discontinuance from the plaintiffs on June 13, 2024.
The legal conflict originated from allegations by Mr. Otedola of “fraudulent transactions” on his company’s accounts managed by Zenith Bank.
Filed on March 12, the suit named Zenon Petroleum & Gas Limited, Seaforce Shipping Co. Limited, Luzon Oil & Gas Limited, Garment Care, and Mr. Otedola as plaintiffs, and Zenith Bank, Quantum Zenith Securities & Investment Limited, Veritas Registrars Limited, and Central Securities Clearing System Plc as defendants.
According to Premium Times, court documents indicated that Justice A.O. Faji discontinued the lawsuit at the request of the plaintiffs and the counsel for the first to third defendants, with no objections from the fourth defendant’s counsel.
Mr. Otedola and his companies accused Zenith Bank of unauthorized disposal of his shares, manipulation of accounts, and document fabrication to conceal these actions.
The lawsuit also addressed grievances regarding the calculation and sale of debts to the Asset Management Corporation of Nigeria (AMCON).
Zenon Petroleum claimed that the bank miscalculated debts before selling them to AMCON, which acquired non-performing loans from banks in an effort to recover them.
At the time of AMCON’s takeover, Zenon’s account was overdue by N39 billion, but Zenith Bank allegedly inflated this to N49 billion, resulting in AMCON paying N44.1 billion.
Efforts to reconcile these issues outside the courtroom had been ongoing but unsuccessful, leading Mr. Otedola to pursue legal action.
Sources revealed multiple failed meetings in May, during which attempts to resolve the dispute without litigation fell through.
Zenith Bank had agreed to refund N205 million, debited wrongly from Zenon’s account, with interest via bank draft, but further contentions persisted.
Other allegations included unauthorized debits from Seaforce Shipping Company Limited’s accounts, with claims of false debt statements presented by Zenith Bank.
Seaforce successfully proved it had a credit balance as of 2018, despite the bank’s claim of a N5.9 billion debt as of February 2024.
The bank was also accused of selling Zenon’s shares at a loss and executing transactions that led to significant financial losses for Mr. Otedola’s companies.
The commissioner of police at the Force Criminal Investigation Department had summoned Zenith Bank’s managing director over allegations of unauthorized debits and misrepresentation.
This inquiry, triggered by a petition, highlighted a significant unauthorized withdrawal in 2011, which compounded the financial disputes between the parties involved.
