A legal firestorm has erupted over Fidelity Bank Plc’s 2024 Annual Report, as lawyers representing Sagecom Concept Limited have written a petition to the Central Bank of Nigeria (CBN), accusing the bank of concealing a multi-million-dollar judgment debt under its litigation disclosures.

In a letter dated May 20, 2025, signed by Adeyinka Olumide-Fusika, SAN, of M.A. Banire & Associates/Citipoint (Legal Practitioners), the legal team asserted that Fidelity Bank significantly understated its liabilities by reporting only N2.274 billion as provisions for litigation and claims—despite an enforceable judgment of over $129 million against it as of December 31, 2024.

The petition, addressed to the Director of Banking Supervision at the CBN, calls for immediate regulatory scrutiny of Fidelity Bank’s financial reporting practices, which the lawyers allege were “blatant and deliberate misstatements and misrepresentations.”

Final Supreme Court Judgment Ignored

The contentious litigation, originally filed by Sagecom Concept Limited in 2011 (Suit No. LD/1734/2011), spanned over a decade and culminated in a Supreme Court ruling on April 11, 2025, in Sagecom’s favour. The courts consistently ruled in favour of Sagecom at the High Court, Court of Appeal (Appeal No. CA/L/494/2018), and ultimately the Supreme Court (SC/CV/602/2021).

Despite these outcomes, Sagecom’s legal team said Fidelity Bank failed to reflect the liability accurately in its audited accounts. As of December 31, 2024, the judgment debt stood at $129,321,631.73, and due to compounded interest of 19.5% per annum, the amount had risen 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 said.

According to the petition, the “misrepresentation” conveyed the impression to shareholders and the public that Fidelity Bank’s exposure was modest—just over two billion naira—when in fact it was over 90 times greater.

Alleged Media Manipulation

The letter also accused Fidelity Bank of attempting to control public perception through media spin and the top management of Fidelity Bank Plc of attempting to preemptively shape the narrative before enforcement actions commenced.

True to form, the bank released a follow-up statement titled “Fidelity Bank Clarifies Position on Court Judgment inherited from Defunct FSB International Bank”, portraying the judgment as an inherited liability dating back before Fidelity’s acquisition of FSB International Bank.

However, Sagecom’s lawyers insist the legal process was transparent and rigorous, and the claim that the matter is “inherited” does not absolve Fidelity Bank of legal and financial responsibility.

The CBN had earlier released a statement downplaying the issue, assuring stakeholders and depositors that there was “no cause for alarm” regarding Fidelity Bank’s operations. The CBN described the circulating reports as “misleading,” though it did not directly address the specifics of the Sagecom case.

In response, the lawyers urged the CBN not to “fall to the manipulation” of its supervisee and not to be complicit in what they described as a systemic attempt to mislead regulators and the public.

The legal team wrote: “It is our honest and sincere belief that if the judgment of the High Court which was delivered on 30/01/2018 and had therefore been in existence for seven years prior to the 31/12/2024 issuance of the Annual Report) and that of the Court of Appeal (which was delivered on 7/5/2021 and had therefore been in existence for about three and a half years prior to the 31/12/2024 date of the Annual Report) had been fully, truly, factually disclosed to your Banking Supervision Officers having the remit over your supervisee, it would have been most impossible for the said Annual Report to have been approved or authorised by the Central Bank of Nigeria for issuance and dissemination to the shareholders of your supervisee and the public at large.

“Since the final judgment, which was that of the Supreme Court, was delivered in the matter on the 11th of April 2025, no serious step has been commenced by us to even execute the judgment.”

They also offered to engage directly with the CBN prior to initiating enforcement actions, indicating a willingness to cooperate in a “reasonable manner” that acknowledges the CBN’s supervisory role.

In addition to the letter sent to the Central Bank of Nigeria, Sagecom Concept Limited’s legal representatives also informed the Managing Director/CEO of the Nigeria Deposit Insurance Corporation (NDIC) about the ongoing litigation and the substantial judgment debt against Fidelity Bank Plc.

The lawyers sent a separate letter dated May 20, 2025, copying the NDIC in the communication with the CBN. The letter, titled ‘RE: SAGECOM CONCEPT LIMITED VS FIDELITY BANK PLC & ANOR (JUDGMENTS IN SUIT NO LD/1734/2011; APPEAL NO CA/L/494/2018; SUPREME COURT NO SC/CV/602/2021),’ formally notified the deposit insurer of the significant financial liability that Fidelity Bank faces as its insured institution.

The letter stated: “As counsel for the judgment-creditor, Sagecom Concepts Limited, in the matter in the above caption, in which a quite significant judgment-sum is now outstanding against your insured institution, Fidelity Bank Plc, we have deemed it fit to put you in copy of the attached letter to the Central bank of Nigeria respecting the matter.”

Background

The dispute dates back to 2002 when FSB International Bank granted a $3 million loan to G. Cappa Plc, secured by a mortgage on a property in Ikoyi, Lagos.

In its abridged prospectus dated June 5, 2024, issued for a public offering by way of an offer for subscription of 10 billion ordinary shares of 50 kobo each at ₦9.75 per share, Fidelity Bank disclosed that it was “presently involved in sixty-eight (68) cases as of 31 January 2024.”

The bank further stated: “Of the sixty-eight (68) cases listed in the schedule, the Solicitors to the Transaction identified twenty-four (24) case files maintained by the Bank (comprising copies of court processes) that fall within or above the materiality threshold.

Hundred and Fifty Million Naira) and USD$633,750 (Six Hundred and Thirty-Three Thousand, Seven Hundred and Fifty United States Dollars) excluding interests, which may accumulate on the judgment sum until same is finally liquidated.”

As of May 20, 2025, $633,750 was valued at ₦1,020,952,237.50 using the exchange rate of ₦1,610.97 per dollar, a figure that falls significantly short of the approximately ₦225 billion claimed.

Meanwhile, the Lagos court awarded significant special damages in favour of Sagecom Nigeria Limited, the claimant in a protracted legal battle over a multi-unit residential property comprising several flats and two penthouses at No. 25, Probyn Road, Ikoyi, Lagos.

In its ruling, the court directed the second defendant, G. Cappa Plc, and the first defendant, Fidelity Bank Plc, to jointly and severally pay compensation to Sagecom for lost rental income. The awarded amounts were determined based on the annual rental value of each unit, denominated in U.S. dollars or its equivalent in Naira at the prevailing Central Bank of Nigeria (CBN) exchange rate at the time of payment.

The court’s assessment of damages took into account the specific rental values and the dates on which the losses were deemed to have commenced—ranging from November 2005 to December 2006 for different units. Up until June 20, 2011, liability was assigned solely to G. Cappa Plc.

However, from June 21, 2011 onward, both G. Cappa and Fidelity Bank Plc were held jointly and severally responsible. That liability remains in place until Sagecom either regains possession of the property or the original 25-year lease—granted to G. Cappa by NEPA in January 2001—expires, whichever comes first.

The annual rental values for the units ranged from $30,000 to $67,500 each. Specifically, Flat 5 was valued at $30,000 per year; Flats 2 and 8 at $33,750; Flat 9 at $56,250; Flats 1, 3, 4, and 6 at $60,000; Flats 7 and 10 at $52,500; and both penthouses at $67,500 each. These amounts are payable in U.S. dollars or their Naira equivalent, calculated at the Central Bank of Nigeria’s official exchange rate on the payment date.

The court’s ruling compensates Sagecom for the extended period during which it was denied rental income following the 2005 purchase of the property—a transaction later deemed to have breached an existing court injunction.

Damages are calculated from each unit’s respective start date until Sagecom either regains possession or the 25-year lease, which began on January 1, 2001, expires—whichever occurs first.

Additionally, the court ordered that interest on the awarded annual rental values accrues at a daily compounded rate of 19.5% per annum, starting from each annual due date until full payment is made.