By Adeyemi Obadimu (VERON)
STANBIC IBTC Holdings PLC is embroiled in a legal storm, with a staggering 405 lawsuits piling up against the financial giant, NEWSEXTRA learnt.
To this end, the company has set aside a colossal N260 billion to deal with its mounting legal troubles, raising serious concerns about its corporate governance and financial stability.
The Group’s litigation portfolio, as of September 30, 2024, includes claims totaling N260,820,169,869.44; USD$ 1,942,819.15 & GB £75,840.71
Despite these overwhelming figures, the bank’s leadership remains adamant that these legal battles will not impact its financial health—a claim that rings hollow given the sheer volume and value of pending cases.
AMCON Dispute Highlights Questionable Dealings
One of the most alarming cases is the ongoing legal clash with the Asset Management Corporation of Nigeria (AMCON). The dispute, which dates back to December 2012, revolves around a questionable transaction where STANBIC IBTC allegedly sold non-performing loans to AMCON at an inflated valuation of N10 billion. AMCON later challenged this valuation, unilaterally revising the figure down to N5.7 billion and accusing the bank of misrepresentation.
When AMCON sought to recover what it claimed was an overpayment, STANBIC IBTC refused, leading to a drawn-out legal battle.
In a shocking turn, the Central Bank of Nigeria (CBN) intervened in July 2019, directly debiting the bank’s account to recover N4 billion. This unprecedented action suggests serious regulatory concerns about STANBIC IBTC’s financial dealings.
While the bank initially lost its case at the Federal High Court, the Appeal Court overturned the decision in 2022, ruling that AMCON had no authority to reverse the sale outside the 12-month window set by its own regulations.
However, AMCON has now escalated the case to the Supreme Court, where a final ruling is expected in 2025. This prolonged legal battle raises significant doubts about the integrity of STANBIC IBTC’s financial transactions and its ability to operate within regulatory frameworks.
A Pattern of Legal Controversy
The AMCON dispute is just one of hundreds of lawsuits against the bank, painting a troubling picture of a financial institution mired in legal uncertainty.
With N260 billion set aside for litigation, it is evident that STANBIC IBTC anticipates more legal woes ahead. According to market observers, he sheer volume of claims suggests a pattern of corporate missteps, raising red flags for investors and stakeholders alike.
Despite the bank’s assurances that these lawsuits will not materially affect its financial position, the market remains skeptical. If the Supreme Court rules against STANBIC IBTC in the AMCON case, analysts believe this could set a precedent for further liabilities, potentially, destabilising the bank’s financial standing.
What Lies Ahead for STANBIC IBTC?
As the company faces increased legal scrutiny, its reputation hangs in the balance. Investors and customers are left questioning whether the bank is truly as stable as it claims, or if it is merely masking deeper financial troubles.
With the Supreme Court set to weigh in on the AMCON case in 2025, STANBIC IBTC’s future remains uncertain.
For now, the bank continues to operate under the cloud of litigation, with hundreds of billions of naira earmarked for legal battles. Whether it emerges unscathed or suffers a financial hit remains to be seen, but one thing is clear: STANBIC IBTC’s legal troubles are far from over.
In the ordinary course of business, the Group is exposed to various actual and potential claims, lawsuits, and other proceedings that relate to alleged errors, omissions, and breaches. The Directors are satisfied, based on present information and the advice of legal counsel, that no material loss is likely to be incurred by the Group in respect of these claims.
The Group’s litigation portfolio as of 30 September 2024 comprised 405 cases, with a total claim value of monetary claims against the Group was .
While the total claims filed against the Group are substantial, the Directors believe that the ultimate resolution of these matters will not have a significant adverse effect on the Group’s financial position or profitability. The Group has made adequate provisions where necessary, and management continues to monitor and review legal risks proactively.
