Chairman of FBN Holdings and principal owner of Geregu Power, Femi Otedola has levelled serious allegation against Zenith Bank, accusing them for 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 steams 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.
This disagreement between them has escalated to include litigation and police investigations, with the Force Criminal Investigation Department (FCID) now involved, Premium Times says.
The Dispute
The battle between Mr. Otedola and Zenith Bank steems 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.
According to report, this latest meeting is the third reconciliation attempt between the parties this month, all of which have been unsuccessful.
The report from 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 as such 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.
