Fidelity Bank Plc is accused of deliberately concealing a judgment debt of over $129 million in its 2024 annual report, prompting a petition to the Central Bank of Nigeria from Sagecom Concept Limited’s lawyers
[dropcap]F[/dropcap]idelity Bank Plc is embroiled in a significant legal controversy, facing accusations from lawyers representing Sagecom Concept Limited that it deliberately concealed a multi-million-dollar judgment debt in its 2024 Annual Report.
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This has prompted a petition to the Central Bank of Nigeria (CBN), calling for immediate regulatory action.
In a strongly worded letter dated May 20, 2025, signed by Adeyinka Olumide-Fusika, SAN, of M.A. Banire & Associates/Citipoint, the legal team asserted that Fidelity Bank grossly understated its liabilities.
The bank reported only N2.274 billion as provisions for litigation and claims, despite an enforceable Supreme Court judgment of over $129 million against it as of December 31, 2024.
The petition, addressed to the Director of Banking Supervision at the CBN, urges swift scrutiny of Fidelity Bank’s financial reporting, which the lawyers describe as “blatant and deliberate misstatements and misrepresentations.”
The contentious litigation, Suit No. LD/1734/2011, initiated by Sagecom Concept Limited in 2011, culminated in a Supreme Court ruling on April 11, 2025, in Sagecom’s favour.
This final verdict followed consistent rulings for Sagecom at the High Court and Court of Appeal.
Despite these definitive legal outcomes, Sagecom’s legal team contends that Fidelity Bank failed to accurately reflect this substantial liability in its audited accounts.
As of December 31, 2024, the judgment debt stood at $129,321,631.73. Due to compounded interest of 19.5% per annum, this amount escalated to $139,362,314.19 by May 20, 2025.
“By so doing, the impression was conveyed to its shareholders and the public at large that its liability on litigations and claims was reasonably within that range,” the lawyers stated in their petition.
They argue that this misrepresentation falsely presented Fidelity Bank’s exposure as a modest sum of just over two billion naira, when in reality, it was over 90 times greater.
By so doing, the impression was conveyed to its shareholders and the public at large that its liability on litigations and claims was reasonably within that range.
The petition further accuses Fidelity Bank of attempting to manipulate public perception through media spin.
The bank had issued a statement titled “Fidelity Bank Clarifies Position on Court Judgment inherited from Defunct FSB International Bank,” portraying the judgment as an inherited liability from its acquisition of FSB International Bank.
However, Sagecom’s lawyers firmly refute this, insisting that the legal process was transparent and the claim of inherited liability does not absolve Fidelity Bank of its financial responsibility.
The CBN had previously issued a statement downplaying the issue, assuring stakeholders that there was “no cause for alarm” regarding Fidelity Bank’s operations and describing circulating reports as “misleading,” without directly addressing the specifics of the Sagecom case.
In response, Sagecom’s legal team has urged the CBN not to “fall to the manipulation” of its supervisee and to avoid complicity in what they allege is a systemic attempt to mislead regulators and the public.
The lawyers highlighted that judgments from the High Court (2018) and Court of Appeal (2021) had been in existence for several years prior to the December 31, 2024, Annual Report.
They expressed their belief that if these judgments had been fully disclosed, the Annual Report would likely not have been approved by the CBN.
While the Supreme Court judgment was delivered on April 11, 2025, Sagecom’s legal team noted that they have not yet commenced serious steps to execute the judgment, offering to engage directly with the CBN to cooperate in a “reasonable manner” that acknowledges the CBN’s supervisory role.
A separate letter, also dated May 20, 2025, was sent to the Managing Director/CEO of the Nigeria Deposit Insurance Corporation (NDIC), formally notifying the deposit insurer of the significant financial liability against Fidelity Bank Plc.
The protracted legal battle stems from a 2002 dispute when FSB International Bank granted a $3 million loan to G. Cappa Plc, secured by a mortgage on a property in Ikoyi, Lagos.
Fidelity Bank’s abridged prospectus, dated June 5, 2024, for a public offering, had disclosed involvement in 68 cases as of January 31, 2024. Of these, 24 cases met or exceeded a materiality threshold, with the bank being a defendant in 17 cases.
The prospectus claimed that the total monetary sum in three cases where judgment was delivered against the bank amounted to ₦150,000,000.00 and USD$633,750 (excluding interests), a figure significantly lower than the amount claimed by Sagecom.
At the exchange rate of ₦1,610.97 per dollar as of May 20, 2025, $633,750 is valued at approximately ₦1.02 billion, which falls far short of the claimed approximately ₦225 billion in the Sagecom case.
The Lagos court’s ruling in the Sagecom case directed G. Cappa Plc and Fidelity Bank Plc to jointly and severally compensate Sagecom for lost rental income from a multi-unit residential property in Ikoyi, Lagos.
Damages were assessed based on annual rental values ranging from $30,000 to $67,500 per unit, payable in U.S. dollars or its Naira equivalent at the prevailing CBN exchange rate.
Liability for these damages was assigned solely to G. Cappa Plc until June 20, 2011, after which both G. Cappa and Fidelity Bank Plc became jointly and severally responsible.
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This liability continues until Sagecom regains possession or the original 25-year lease expires. Additionally, interest on the awarded annual rental values accrues at a daily compounded rate of 19.5% per annum until full payment is made.
