E-Financial
Zumax Files N4.1Bn Suit against CBN over ‘Fraudulent’ Receivership
Zumax Nigeria Limited, an oil services company, has filed a N4.1 billion lawsuit against the Central Bank of Nigeria (CBN), alleging gross negligence and complicity in what it calls a fraudulent receivership imposed by the apex bank.
In the case, which is before the Federal High Court, Lagos, Zumax claimed that the CBN failed in its statutory duty to supervise banks and protect customers’ interests.
At the hearing of the matter on Tuesday before Justice Akintoye Aluko, Chief Wole Olanipekun (SAN) told the court that the Plaintiff (Zumax) had an application dated February 20, 2025, asking the court to hear the application.
He urged the court to allow him to move the application as the defendant had responded.
Olanipekun also told the court that the Plaintiff and defendant’s preliminary objections can be consolidated and heard together.
He stated that the priority of which application to be heard first shouldn’t arise as the Plaintiff has not opposed the hearing of CBN’s preliminary objection.
But Adeleke Agboola (SAN), counsel, counsel, told the court that the defendant has a preliminary objection in the suit, which commenced as a writ of summons challenging the jurisdiction of the court.
He argued that CBN filed its notice of preliminary objection within time and that the Plaintiff has responded to it.
Agboola said: “This preliminary objection has priority over any other applications. The Plaintiff’s application is not meritorious.
“There is no suggestion by the claimant that we did not file within time. We are saying that this court does not have the jurisdiction to hear this matter. I urge your lordship to allow us to argue this matter.
“There is no doubt that preliminary objection takes precedence; it says it must be heard first, and determining our objection is very serious; we have complied strictly by the rules.
“We urge this court to hear the preliminary objection and dismiss the Plaintiff’s application.”
In his response, Olanipekun said: “My learned friend said the application we filed is not meritorious. It is the court that can make any pronouncement on that.
“My lord, even when we talk of being tidy, we are not saying the court should not hear his preliminary objection. He is now the one saying that our application should not be heard.
“The court has to determine whether the objection has to be heard first or the Plaintiff’s application dated February 20, 2025, has to be heard first.
“It’s no longer the law; in fact, it has never been the law that when there is a preliminary objection, the court will say let’s take it first. We urge your lordship to take our application that has not been contested by the defendant.”
After listening to the submissions and arguments of both parties, Justice Aluko adjourned the case till April 22, 2025, for ruling on which application to hear first.
According to court documents, Zumax had and maintained its account with the defunct IMB International Bank Plc., which, under several mergers and consolidations of banks, ultimately fused into the much larger banking institution known as First City Monument Bank (FCMB).
The Plaintiff said it obtained a facility from IMB International Bank, an overdraft facility of N50m, which was later increased to N200m in/or at the first half of 1998.
However, the bank allegedly inflated the company’s debt and, by December 6, 2002, claimed it had risen to N465.6 million, the claim which was vehemently disputed by Zumax.
Zumax contends that FCMB, under its former Managing Director Edwin Chinye, took control of its foreign currency earnings held in a JP Morgan Bank account through its sister company, Redsear Limited.
According to the plaintiff, the Bank’s Managing Director not only insisted upon and got shares in Redsears Limited and a directorship of that company as a condition precedent for the loan, he also allegedly inserted himself as the lone signatory for the company’s bank account with JP Morgan Bank.
The plaintiff further alleged that “the bank misappropriated $ 4 million from this account, a shortfall discovered during an audit.
“Rather than addressing the dispute, FCMB appointed receivers to take over Zumax’s operations, a move the company described as fraudulent.
“The receivership, which lasted from December 2002 until 2022, led to severe financial losses, including the collapse of Zumax’s business and the loss of contracts with multinational oil companies such as Chevron.
“The company claimed it was unable to operate for two decades due to the receivership, which was based on what it describes as an entirely fabricated debt.
“Zumax further alleged that despite repeated petitions, the CBN failed to investigate FCMB’s actions or intervene to prevent the alleged financial mismanagement.
“The company maintained that a 2007 CBN report confirmed that it had paid over N547 million to FCMB, proving it was never in debt to the bank.
“Additionally, the Court of Appeal ruled in December 2021 that the consent judgment upon which the receivership was based was fraudulent and should be set aside.”
The plaintiff is seeking a court declaration that the CBN was negligent in its duty to regulate Nigerian banks.
It’s also asking for special damages amounting to $ 41 million, including lost income and asset depreciation; general damages of N2 billion, exemplary damages of N2 billion, and legal costs amounting to N100 million.
But the CBN’s preliminary objection is challenging the jurisdiction of the Court to hear the matter.
Banks in Nigeria closed 29.4 million accounts as of March 2025, according to the latest report by the Nigerian Interbank Settlement System (NIBSS).
The figure represents a sharp year-on-year increase of 30.43 per cent from the 22.54 million closed accounts recorded in March 2024.
It also reflects a steady rise in account closures over recent months, with 33.29 million closed accounts reported in February 2025 and 29.43 million in January.
The report also revealed a significant increase in dormant accounts, which surged to 33.39 million in March 2025, up from 19.79 million in the same period in 2024, a 71.3 per cent rise in inactive accounts over the past year.
Despite the spike in closures and dormant accounts, the number of active bank accounts rose from 219.64 million in March 2024 to 320.05 million in March 2025, representing an increase of over 100 million, or 45.7 per cent.
NIBSS defines a dormant account as one that has seen no deposit, withdrawal, transfer, or point-of-sale transaction for a period of six months.
The surge in account closures and dormancy follows the Central Bank of Nigeria’s directive issued in December 2023, mandating commercial banks to restrict Tier-1 accounts not linked to a Bank Verification Number (BVN) and National Identification Number (NIN) by March 1, 2024.
In response to the directive, BVN enrolment increased from 61.6 million in April 2024 to 66.23 million by July 2025, as more Nigerians rushed to meet the CBN’s compliance deadline.
The Joint Committee of the House of Representatives on Public Accounts and Public Assets has threatened to issue a warrant of arrest against Mr. Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN), over repeated failure to honour its invitations regarding the probe into non-compliance with the Fiscal Responsibility Act 2007 and Finance Act 2020.
Olayemi Cardoso,, Gov, CBN
In a joint statement released on Friday and signed by Hon. Bamidele Salam and Hon. Ademorin Kuye, chairmen of the committees, the lawmakers decried the CBN governor’s continued disregard for legislative summons.
The committee is investigating the non-remittance of operating surplus as well as the mismanagement of unclaimed dividends and dormant account balances.
According to the committee, the Office of the Auditor General for the Federation reported a liability of N5.2 trillion in unremitted operating surplus due to the federal government from 2016 to 2022; a claim corroborated by the Fiscal Responsibility Commission in a separate submission to the National Assembly.
The committee cited provisions of the Finance Act 2020, which mandate that unclaimed dividends from publicly listed companies and dormant bank account balances older than six years be transferred into the Unclaimed Fund Trust Fund. The fund is to be managed by a Governing Council led by the Minister of Finance and the Debt Management Office (DMO).
Contrary to this, the CBN maintains that the Financial Institutions Act 2020 empowers it to manage dormant balances.
However, the committee noted that the Attorney General of the Federation has issued a legal opinion affirming that the Finance Act 2020 remains the valid law guiding the management of such funds.
Following extensive submissions, the committee resolved that the CBN must remit N3.64 trillion, representing 70% of the undisputed N5.2 trillion operating surplus, within 14 days from receipt of its June 27, 2025, directive, pending final reconciliation of the disputed amount.
Additionally, the apex bank was directed to submit a detailed report on the total sum of unclaimed dividends and dormant account balances by June 30, 2025.
The CBN was also ordered to transfer these funds into the Unclaimed Fund Trust Fund within 14 days and furnish the House with evidence of the transaction.
The lawmakers expressed frustration that, despite the clear directives and ample time, the CBN governor has failed to respond or appear before the joint committee to provide an explanation.
“In view of this continued defiance, the Committee will be compelled to exercise its constitutional powers to compel Mr. Olayemi Cardoso to appear before it,” the statement warned.
Moody’s has upgraded the outlook on Ecobank Transnational Incorporated’s long-term issuer and senior unsecured debt ratings to stable from negative.
In the latest rating commentary, made available to media on Thursday, Moody’s also affirmed the pan-African banking group’s B3/Not Prime long- and short-term issuer ratings; B3 senior unsecured debt rating; b2 notional Baseline Credit Assessment and b1 Adjusted BCA.
ETI’s subsidiaries operate across 38 countries, including 35 African countries, and total assets of $28.9bn as of March 2025, details from the rating note highlighted. Moody’s said the decision to change the outlook to stable on the long-term issuer and senior unsecured ratings reflects ETI’s resilient financial performance.
The rating upgrade also takes into consideration higher dividends being upstreamed to ETI, resulting in lower double leverage and reduced refinancing risk.
The rating adjustment also reflects an expectation that the recapitalisation process of Ecobank Nigeria Limited will be completed by the end of 2025, with limited impact on the group’s financial fundamentals.
“The stable outlook also captures our expectation that a series of capital-boosting initiatives and actions to cure Ecobank Nigeria’s total capital position will be completed before the end of 2025”, according to the ratings agency.
In May 2025, ETI received shareholder approval to raise $250 million in Additional Tier 1 (AT1) capital and announced the launch of the transaction effective 9 July 2025, of which a portion is expected to be downstreamed to Ecobank Nigeria as AT1 capital during Q3 2025.
Ecobank Nigeria’s plan to raise $200m in AT1 capital was noted in the rating note. The ratings analysts said they consider
“We also note that Ecobank Nigeria’s recent successful offer to tender $150m of its February 2026 $300 million notes and consent to remove the capital adequacy ratio covenant from this bond’s terms alleviates risks of an event of default in Nigeria that would trigger cross default at the ETI level. Over the past year, ETI has shown resilience in its financial performance, which supports our change in outlook to stable. Liquidity risks are being moderated by the group’s gradually improving profitability during 2024 and Q1-2025.
“This has translated into a 22 per cent increase in dividends upstreamed to ETI during 2024, these being received from 22 dividend-paying subsidiaries compared to just 14 in 2021,” the rating commentary revealed.
In turn, albeit high, ETI’s double leverage ratio, which measures the liquidity risk taken on by the holding company, as a result of it borrowing in order to invest in the equity of its subsidiaries, has eased to 168 per cent as of December 2024 from 173 per cent in 2023.
Additionally, the stable outlook reflects reduced liquidity risk at the holding company level with the refinancing of short-term liabilities in 2024 with longer-term funding.
Moody’s said this is underpinned by demonstrated market access, notably through senior unsecured notes issuance of $400m in October 2024 and a tap increase of $125m in May 2025, maturing in October 2029.
ETI’s B3 long-term issuer ratings affirmation reflects the affirmation of the group’s b2 notional BCA; the affirmation of the group’s b1 adjusted BCA as captured by a one-notch uplift for affiliate support, reflecting Moody’s assessment of a moderate probability that the firm’s major institutional shareholders would extend support to the group. Moody’s said asset quality for the group has improved over recent years.
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