- Lambasts Bank Over Procedural Non-Compliance
By Abiola Olawale
One of Nigeria’s leading financial institutions, Fidelity Bank, has reportedly found itself on the verge of fresh concerns and soaring public anxieties following an order by Nigeria’s Supreme Court, imposing a colossal fine of N225 billion.
This development has triggered fresh anxieties, twists and re-echoes memories of how the bank equally faced similar challenge in the past over allegations of inappropriate receipt, and reported failure to duly report the sum of $115million from erstwhile minister of Petroleum Resources, Diezani Alison-Madueke, to the Nigeria Financial Intelligence Unit (NFIU) and other regulators as expected of it going by enabling compliance rules.
Also named in the alleged financial issues at the time was Lenoil Nigeria Ltd and its managing director, Laiton Adesanya, who was allegedly picked up by anti-graft operatives along with the Bank’s head of operations, one Martins Izuogbe while Nnamdi Okonkwo, the Bank’s managing director at the time was reportedly questioned over his role in the entire saga.
Fidelity’s ED(North) at the time, Mohammed Balarebe had to step in as acting managing director on the resolution of the Board of directors of the Bank. While the current situation is somewhat different, there are concerns as to how things would shape up with the apex bank ruling. A report by the Peoples Gazette highlighted that the Supreme Court ruling was made following a legal dispute bordering on allegations of contractual breaches and Fidelity Bank’s purported failure to obey court rulings. According to stakeholders, the cases mirror the dynamics at play in certain financial institutions.
According to reports, the apex court ruling could potentially have far-reaching implications for the bank. The foundation of the legal tussle which travelled up to the Supreme Court started innocuously when an engineering firm, G.Cappa Plc, approached the Federal High Court in Lagos State over alleged assets seizure executed by Fidelity Bank.
It was gathered that Fidelity Bank allegedly seized the engineering company’s assets in Lekki, Lagos State and Ibadan, Oyo State, over alleged default on payments on two loans. According to the report, the loans, which were recorded as $3 million and N100 million at the time, were executed by FSB International Bank in the 2000s prior to Fidelity Bank’s acquisition of FSB and its liabilities as part of the banking sector consolidation in 2005 during the administration of former President Olusegun Obasanjo.
Given that reality, Fidelity Bank was said to have gone after individuals and entities that were indebted to the Bank. According to reports, this led to the purported seizure of G. Cappa’s assets in Ikoyi and Ibadan, respectively, that had been used as collateral to secure the loans. Recall that the company allegedly defaulted in 2005 in repayment of the said loans.
However, there was a dramatic twist as G. Cappa proceeded to sue Fidelity Bank at the time, and a federal judge in Lagos ordered Fidelity to desist from depletion of the firm’s assets, court documents had alleged. However, Fidelity’s management allegedly failed to obey the court order and proceeded to list the assets for sale to potential buyers. This was how one firm called Sagecom came into the picture.
The second dramatic twist and turn of events in the raging legal tussle arose following Sagecom’s decision to file a legal action in court, seeking redress concerning the assets of G. Cappa, which it allegedly bought from Fidelity Bank. According to court documents as quoted by the Peoples Gazette, Sagecom, run by Bamidele Ogunkanmi and a United States.-based Nigerian Dakore Miriki, reportedly said it paid N350 million to acquire some of the properties from Fidelity Bank.
However, Sagecom maintained that it proceeded to exercise caution and retrieve its payment to Fidelity Bank after observing a January 2006 disclaimer that stated that a court order had prevented Fidelity from selling G. Cappa’s assets. This was how the seemingly innocuous case which began at the Lagos State High Court, travelled up to the Supreme Court in 2018, leading to a decisive judgement last month.
At the lower courts, Sagecom, represented by the trio of Muiz Banire and Adeyinka Olumide-Fusika, were said to have insisted that it suffered grave damages through Fidelity’s action because it borrowed the N350 million from FMCB to secure the problematic property from Fidelity, with a troubling 19.5 per cent annual interest.
However, Fidelity lawyers argued that the bank was not responsible for the damages and blamed G. Cappa for collecting rents on the Lagos properties following the initial court injunction. However, while ruling on the matter on April 11, 2025, a five-justices panel unanimously held that Fidelity must proceed to pay for its decision to disregard a subsisting relief granted by a federal court in Lagos.
“At the heart of the matter lies the appellant’s somewhat egregious conduct in selling a property it knew was subject to a restraining court order,” the court said, adding that Fidelity deprived Sagecom of “the possession and the economic benefits of its purchase for many years.”
The justices lashed Fidelity Bank’s management conduct at the early stages of the dispute, stating throughout the judgement that the bank admitted that it received notice of the injunction that blocked it from selling G. Cappa’s assets but still proceeded to sell off the assets.
“This was not mere negligence but a deliberate disregard for both the court’s authority (with the intention to undermine it) and the first respondent’s rights as an innocent purchaser,” Justice Jummai Hannatu Sankey said in her concurring opinion.
“The appellant has failed to demonstrate any perversity in the findings of the lower courts or any miscarriage of justice warranting this court’s intervention,” the court added.
The apex Court then upheld the damages awarded by the Lagos high court in a June 20, 2011, ruling against Fidelity. The court which praised the Lagos judge for what it called proper handling the case, consequently ordered Fidelity to equally offset all accrued earnings for several flats that Sagecom could not possess for years.
Following the Supreme Court judgement, Justice Olabisi Akinlade of the Lagos State High Court calculated damages due to Sagecom, declaring that as of May 16, 2025, Fidelity Bank owed the firm $139,064,896.18, value at (N225,285,131,812.38.)
Recall that this is not the first time Fidelity Bank is coming under controversy. In 2016, it was alleged that the bank was involved in controversial deals involving the sum of $115million purportedly handed over to it by former Petroleum Resources Minister, Diezani Alison-Madueke.
In a statement at the time, the bank, while confirming ongoing investigations had, however, claimed that it acted appropriately. Its statement then read in part: ““Our attention has been drawn to reports in the media on investigations into transactions undertaken by the Bank in the normal course of business in 2015. The transactions are now the subject matter of investigations by the Economic & Financial Crimes Commission (EFCC),” the bank said in a statement.
“We can confirm that the transactions were duly reported as required by the regulators and the Bank is cooperating fully with the authorities on the investigation.
“We assure our numerous stakeholders, including our customers that we are working assiduously towards a quick resolution of the issues. Thank you.”
