Home BUSINESS Zenith Bank in alleged N20billion fraud: May face liquidation over high wire...

Zenith Bank in alleged N20billion fraud: May face liquidation over high wire financial crime links to ICBC, CHINA




*As Abuja High Court Is Set To Deliver Judgement Amidst fears and tension, July 5, 2019

By Dennis Chuks

ABUJA- If information at the crime desk of Daily Watch is anything to go by, there is fire on the Mountain as Zenith bank, the biggest bank facing a huge alleged financial crime which is also linked to the biggest bank fraud of the millennium of a whopping sum of N20 billion linked to big foreign financial institutions. As it appears now, an Abuja based High Court is set to deliver judgement tomorrow amidst fears and tension.

According to financial experts, “a nation’s economic growth is directly connected to the level of development of its banking industry”.

It is against this background that stakeholders see the forthcoming judgement in a N20 billion lawsuit brought against one of Nigeria’s most highly capitalized Banks, Zenith bank Plc., by Owigs and Obigs Nigeria Limited, before a Federal High Court sitting in Abuja as another test case in the implementation of the banking reforms.

Owigs and Obigs Nigeria Limited and Zenith Bank PLC, the Plaintiff is seeking the sum of above $43million as liquidated losses, with additional N2 billion as damages for the loss of goodwill and further trading opportunities with the Chinese Chamber of Commerce/International Chamber of Commerce, Asia and local suppliers of solid minerals, as well as sundry/collateral expenses incurred in securing and running the contract with Chinese companies, but which were all lost as a result of the illegal and fraudulent termination of the contract by Zenith bank Plc.

Also, the Plaintiff is demanding another N1billion from the defendant as aggravated damages.

Our source reveals that Zenith Bank might risk several of its customers as the consequences of the outcome of the judgement may be grave.

In an attempt to save its face and bluff the Plaintiff’s demand for justice, Zenith bank had reportedly boasted,” the bank owns the government (PDP government, under Goodluck Jonathan) which includes the judiciary, Economic and Financial Crimes Commission (EFCC) and the Central Bank of Nigeria (CBN) and does not care where you want to go, but be sure, no power can query Zenith bank in the country over this matter.”

Jim Ovia, CON, Group managing director/CEO of Zenith bank plc

Local investors are said to be very apprehensive of the banking business environment in the country, as the suit is connected to the biggest bank in the world, (Industrial and Commercial Bank of China, ICBC), with an asset base of 3.6 trillion dollars as at 2012, and Singapore brokers, Eglone Group Asia PTE among others.

On July 30, 2014, Daily Watch investigations confirmed that the Industrial and Commercial Bank of China (ICBC) officially authenticated a litigation threat message against the defendant, Zenith Bank PLC via a swift message transmitted to the defendant, threatening to sue Zenith bank at the international Court of Arbitration, with a further threat to petition the federal government of Nigeria through its Embassy in China and also petition the Central Bank of Nigeria (CBN).

The earlier threat by the world’s biggest bank to drag Zenith bank to international court of Arbitration followed her loss of confidence in Zenith bank Plc.

In his submission, the Plaintiff had alleged in a shocking revelation in its final written address that, “prior to this moment that there were unresolved issues arising from three-fold demands made by the defendant in respect of the established net earnings of $38.4million to have 34% fair share from the net profit as the defendant’s entitlement and the compensation for fully participating in the contract drafting”.

According to the Plaintiff, the defendants further demanded, “for partnership with the Plaintiff through their proxy company in the second phase of the contract valued for $240 million, tenured for 42 months, after successful completion of the underlying contract” to which the Plaintiff declined.

CBN Governor, Godwin Emefiele

The Plaintiff’s refusal to the bank’s demands for inclusion in the sharing of the net profit of the $64million contract, led to the defendant’s alleged fraudulent activities evident in the termination of the contract. Consequently, Zenith bank’s appointment as the advising bank was terminated by the Plaintiff and the bank replaced with Stanbic IBTC Bank, pending the consummation of the already issued letter of credit.

Counsel to the Plaintiff regretted that “ it was so disheartening that the defendant for no just cause as at 22 May 2014, having earlier issued the said Performance Bond (PB) copy that was meant for the Industrial and Commercial Bank of China (ICBC) in favour of the importer to the Plaintiff, yet refused to swift same, knowing so well that it was the duty of the Plaintiff to swift the Performance Bond (PB) as she is not a bank to do so, even after deducting funds from the Plaintiff’s account as charges for the said Performance Bond (PB) swift.”

Lamenting the high level of fraudulent activities in Nigerian banks, as exemplified by Zenith bank Plc, a Singapore international trade broker, Eglone Group Asia PTE, involved in the transaction, regretted, “I don’t think I can pass this information to the buyer, because it will complicate issues and further rubbish the image of Nigerian and African banks in the eyes of international community”.

Frowning still at the whole Zenith Bank’s scheme to short-change the plaintiff, Eglore Group Asia PTE bellowed, “How could a bank release an official copy (not draft) of Performance Bond, dated 16th May, 2014, which has not been yet been transmitted out by swift. I must tell you that I am so disappointed at the way your bank (Zenith bank PLC) is handling this case.

“Nigerian bankers could kill your business, if you relax on them. They just sit around do nothing to your case unless you push them”, Eglone Group Asia PTE, reacts.

Counsel to Plaintiff, Barrister Jude Nwachukwu, noted with dismay that “the harvest of unprofessional conduct by defendant resulted in a total loss of confidence and trust on Zenith bank by the Industrial and Commercial Bank of China”, adding that “being confronted with litigation threat by Industrial and Commercial Bank of China (ICBC), on what action they will take against Zenith bank for gross professional misconduct over the Performance Bond issuance and the subsequent recall violations, but Zenith bank, rather resorted to trade off the Performance Bond fraudulently against the Plaintiff  in an attempt  to escape the wrath of the world’s number one giant bank (ICBC).

Zenith bank, for want of evidence had admitted in the defendant’s witness statement on oath and in her admissions under cross examination in their final written address that ICBC was rather in breach, which was false and self-implicating as averred by the plaintiff’s counsel.

It would be recalled President Muhammadu Buhari on assumption of office embarked on large-scale reforms in the banking sector to conform with global best practices and in line with the economic policies of his administration in order to ease business in Nigeria.

According to experts Zenith bank’s fraudulent dealings with its revered client to suffer huge financial loss was in contravention of Buhari’s bank reform principles.

Following the defendant’s earlier intimidations threats, the Plaintiff became scared, as the Plaintiff went underground until the change of government took place after the 2015 elections.

The aggrieved bank customer accordingly had dragged the bank to the FCT High Court in 2016 over an alleged breach of contract, infringement of bank/customer relationship, incompetence, negligence and gross professional misconduct that has caused the plaintiffs over $64million in loss worth of three major transactions with a Chinese firm for the supply of solid minerals.

Zenith bank, London branch, top management staff

The company is praying the court to award additional N2billion as exemplary damages for the bank’s tort of negligence, which has cost the plaintiffs its goodwill and further contract opportunities in China. Plus, another sum of N1billion as aggravated damages.

The defendant, according to counsel to the Plaintiff, Owigs and Obigs Nigeria Limited, the defendant bank, Zenith bank PLC, on receiving the Letter of Credit from Industrial Bank of China, deliberately failed to advise the Plaintiff accordingly as required in confirming the Letter of Credit (LC) with maximum period of three to five days of receipt of letters of credit or reject same immediately if they were not issued according to her (the defendant’s approval). It rather withheld the letter of credit (LC) and started demanding from the Plaintiff cash cover which was a delay tactics designed to frustrate the transaction while the validity period was fading away until it died completely.

The plaintiff had in the writs of summon deposed that the deliberate unauthorized removal of funds from its account by Zenith Bank caused the termination of the execution of a duly secured foreign contract valued at $64, 107,180.00, after it had already committed for export $10 million worth of material goods as a part fulfilment of the contract term.

The company averred that all attempts it made to get clarification from Zenith Bank as to why the contract was terminated and funds illegally withdrawn from its accounts was rebuffed by the bank. Owigs & Obigs Nigeria Limited also said the unauthorized withdrawal contravenes the Banking and Other Financial Institutions Act 1991 and the Nigeria Deposit Insurance Act. Adding that they were forced to retrench 75 staff and shelve its plan to employ 900 more hands.

Consequently, the plaintiff makes claims against Zenith Bank of N2 billion damages “for loss of goodwill, as well as further trading opportunities with Chinese Chamber of Commerce/ International Chamber of Commerce of Asia and local suppliers of solid minerals and sundry/ collateral expenses incurred in securing and running three foreign contracts with Chinese companies but which were all lost as a result of the unilateral termination of these contracts by the defendant.”

Zenith bank, one of the biggest banks in the world

Daily Watch investigations further gathered that Zenith Bank sequel to the legal action against her as contained in the plaintiff’s reply to defendant’s statement of defense filed on 02 Nov 2016, had instituted different rounds of negotiations with the Plaintiff after tendering an apology, but did not follow through on its promises to indemnify the Plaintiff against all the incurred losses causing Owigs and Obigs Nigeria Limited to seek redress in the court of law.

In its final written address, Zenith bank through its counsel, Samuel O Zibiri (SAN) denied any wrong doing in the matter but admitted that there was a breach of contract committed against Owigs and Obigs, but not by her (Zenith bank), rather by Industrial and Commercial Bank of China or the Chinese companies.

He further argued that the Plaintiff ought to have dragged the Chinese companies to court instead of Zenith bank, describing the Plaintiff’, legal action against the defendant as rather a transferred aggression.

CJN, Justice Walter Samuel Onoghen

In all arguments, claims  and counter claims by  both defendants and plaintiff at the Abuja high court which judgement would be delivered tomorrow July 5th 2019 unfailingly , there is brewing  high tension and fears within the Zenith bank financial institution as no one knows where the pendulum may swing to, both customers are also wary and nerves are high of the development for fear of trapped deposits in case, the unexpected happens.





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