Femi Otedola, chairman of FBN Holdings and majority owner of Geregu Power, has accused Zenith Bank of banking fraud and other malpractices related to a debt involving his former company, Zenon Petroleum & Gas, and other associated firms.
According to Premium Times, Otedola alleges that Zenith Bank engaged in fraudulent activities, including the unauthorised disposal of his shares, manipulation of bank accounts, and forgery of documents.
According to Otedola, these actions were part of a scheme to cover up the bank’s misconduct.
The billionaire businessman has responded by initiating legal proceedings and involving law enforcement.
The Force Criminal Investigation Department (FCID) is now investigating the matter.
The conflict traces back to accusations from Otedola that Zenith Bank used dishonest accounting to inflate his liabilities before selling his multibillion-naira debt to the Asset Management Corporation of Nigeria (AMCON), a government agency tasked with buying bad loans from banks.
Attempts to resolve the issue amicably have failed.
Technical teams from Zenith Bank and Zenon Oil met on May 20, 2024, but could not agree.
A follow-up meeting ended without resolution the next day, prompting Zenon Oil to threaten further legal action.
Documents reviewed by Seaforce, one of Otedola’s companies, indicate that letters of credit related to the debt were opened before AMCON took over the debt in December 2011.
Seaforce claims that Zenith Bank provided fake bank statements to disguise the absence of the actual facility.
In March, Otedola and his associated companies secured an injunction against Zenith Bank, preventing it from trading or paying dividends on their shares until the matter is resolved in court.
According to insiders, Zenith Bank sold 415 million shares owned by Zenon for N4.9 billion in December 2010, only to repurchase them for N5.4 billion a month later, resulting in a net loss of N142.9 million.
Similar transactions led to a cumulative loss of N205.4 million for Otedola’s account.
On May 16, 2024, FCID’s Commissioner of Police, Isyaku Mohammed, summoned Zenith Bank’s managing director over allegations of unauthorised debits amounting to N205.3 million on Zenon’s account.
The police are investigating claims of fraudulent misrepresentation and unauthorised transactions by the bank.
