Femi Otedola, the chairman of FBN Holdings and majority owner of Geregu Power, is embroiled in a heated conflict with Zenith Bank over a controversial debt involving his former company, Zenon Petroleum & Gas, and other firms in which he has interests, accoring to PREMIUM TIMES report.
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Mr. Otedola alleges that Zenith Bank committed banking fraud against him and his companies, claiming the bank unlawfully disposed of his shares, manipulated bank accounts, and forged documents to conceal the alleged misconduct. This dispute has led to litigation and police investigations, with the Force Criminal Investigation Department now probing the matter.
The dispute traces back to accusations from Mr. Otedola regarding dishonest accounting practices by Zenith Bank during the calculation of his liabilities. He claims this malpractice occurred before the bank sold his multibillion-naira debt to the Asset Management Corporation of Nigeria (AMCON). AMCON is a government agency that acquires bad loans from banks, aiming for recovery.
Efforts to resolve the conflict without legal intervention have failed. Sources told PREMIUM TIMES that technical teams from Zenith Bank and Zenon Oil met on May 20, 2024, but the meeting ended inconclusively. A subsequent meeting on May 21 at Lagos Oriental Hotel also failed to yield a satisfactory resolution, prompting Zenon Oil to threaten further legal action.
“This is clearly a waste of time as Zenith Bank is not sincere in resolving this issue out of court,” a source said. “We will now pursue our claims through the judiciary, law enforcement, the CBN, and the court of public opinion, as we believe our claims are genuine.”
Zenon Oil alleges that its letters of credit, which deteriorated into problematic loans acquired by AMCON, were opened before AMCON took over the debt in December 2011. The company ceased operating the account upon AMCON’s takeover. According to Zenon, Zenith Bank admitted in meetings to controversially opening letters of credit after AMCON’s intervention, a practice described as unprofessional.
A document reviewed by PREMIUM TIMES lists the overdue amount on Zenon’s account at N39 billion at the time of AMCON’s intervention, but Zenon claims the bank offered the debt to AMCON for N49 billion. After negotiations, AMCON paid N44.1 billion for the bad debt.
Zenith Bank’s corporate communications unit head, Sunday Enebeli-Uzor, and media relations lead, Ayoola Kusimo, did not respond to requests for comment. However, a top bank official indicated that the matter should not be discussed in the media as it is already in court and under police investigation.
Mr. Otedola confirmed the dispute but declined to provide details, stating that efforts are ongoing to resolve it. “If that fails, I can give you details,” he said.
Seaforce Shipping Company Limited, another company owned by Mr. Otedola, accused Zenith Bank of presenting false bank statements claiming Seaforce owed N5.9 billion as of February 2024, a claim the bank later abandoned when Seaforce provided proof of account credits dating back to 2018. Seaforce described this as fraud, asserting that the bank prepared fake statements.
In March, Zenon, Seaforce, Luzon Oil & Gas, Garment Care Limited, and Mr. Otedola obtained an injunction against Zenith Bank and other entities, forbidding them from trading with the plaintiffs’ shares or paying dividends until a motion for interlocutory injunction is heard.
Documents obtained by PREMIUM TIMES reveal that Zenith Bank sold Zenon’s 415 million shares for N4.9 billion in December 2010 and repurchased them in January 2011 for N5.4 billion, resulting in a net loss of N142.9 million. Similar transactions led to a net loss of N61.5 million for Mr. Otedola, totaling a cumulative loss of N205.4 million, which was debited to Zenon’s main account on January 27, 2011. Zenith Bank reportedly agreed to reverse the debit and pay accumulated interest, though this claim remains unverified.
The police have intervened, with the Force Criminal Investigation Department summoning Zenith Bank’s managing director over allegations of unauthorized debits to Zenon’s account. The investigation follows a petition by Mr. Otedola and his companies, highlighting unauthorized transactions and wrongful debits.
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