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A high-stakes legal tussle is unfolding that involves two heavyweight entities, billionaire businessman Femi Otedola and Zenith Bank, a major Nigerian bank. It’s a dispute over alleged debt fraud that has not only caught the attention of the business community but also raised questions about the ethics of banking practices in the country.
Femi Otedola, a prominent figure in Nigeria’s power and banking sectors, has leveled serious accusations against Zenith Bank. The crux of the matter revolves around the alleged manipulation of accounts and unauthorized financial transactions that have purportedly harmed Otedola’s interests. According to Otedola, Zenith Bank manipulated the financial accounts of his companies, Zenon Petroleum & Gas, and other affiliated entities, inflating debts and even selling his shares without his authorization.
These allegations have led Otedola to take legal action. He has filed a lawsuit and lodged a formal complaint with the Nigerian police, specifically the Force Criminal Investigation Department, seeking justice and accountability.
What the debt controversy is about
The dispute traces back to the handling of certain debts by Zenith Bank, which Otedola claims were unjustly inflated. Initially, these debts were associated with Zenon Petroleum & Gas under problematic letters of credit.
After acquiring the company in December 2011, Otedola asserts that his firm stopped using the implicated account. Yet, he accuses Zenith Bank of continuing to open additional letters of credit, thereby escalating the debt unjustifiably.
When the debts were sold to the Asset Management Corporation of Nigeria (AMCON), a government body that absorbs non-performing loans, the figures had ballooned significantly—from an original N39 billion ($26.2 million) to a reported N49 billion ($32.9 million). The sold amount was eventually set at N44.1 billion ($30 million) after negotiations, a figure Otedola contests as inflated.
Legal actions and court injunctions
In response to these alleged irregularities, Otedola and his businesses have not only sued Zenith Bank but also obtained an injunction preventing the bank from conducting any further transactions that could affect his financial interests without authorization.
This court order also covers Zenith’s securities arm and other associated financial entities, essentially freezing any trading of shares or distribution of dividends concerning Otedola’s holdings until further legal review.
What you should know about Femi Otedola
The legal battle has grown as other companies under Otedola’s umbrella, such as Seaforce Shipping Company Limited, have also filed suits against Zenith Bank. These companies allege similar grievances, including the fabrication of bank statements and unauthorized financial operations that have purportedly harmed their financial standings.
As the chairman of Geregu Power, he has led the company to achieve record revenues and profits.
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