The Nigerian Supreme Court has ruled that Fidelity Bank Plc must pay ₦225 billion in damages to Sagecom Concept Limited, a company based in Ibadan, after a lengthy court case.
To arrange a structured settlement of a staggering judgement debt of N225 billion, Fidelity Bank Plc has begun negotiations with Sagecom Concept Ltd’s legal representatives.
However, according to reports, the Supreme Court’s ruling’s urgency might make it more difficult for the bank to spread out payments without going bankrupt.
“This is the biggest crisis the bank has ever faced,” a top official said during a weekend video call, according to People’s Gazette.
“The obligation is simply too big. If the bank survives this, it will be thanks to the goodwill of the small business that won this unprecedented judgment,” a source revealed.
Fidelity bank’s top management has been shocked by the ruling, the insider, who wished to remain unnamed, continued.
Although Fidelity Bank’s stock has risen 140% this year and closed at N20.80 per share on Friday, the bank’s financial situation is still unstable.
Senior solicitors Kanu Agabi and Onyechi Ikpeazu, as well as Fidelity Bank, declined to comment on the situation.
The lawsuit is based on two loans that engineering business G. Cappa Plc took out from FSB International Bank in the early 2000s: a $3 million dollar loan and a N100 million naira loan.
The interest rates on the loans were high. When the banking industry consolidated in 2005, Fidelity Bank purchased FSB and its debts.
Fidelity bank started seizing assets in Ikoyi and Ibadan that had been used as collateral after G. Cappa allegedly defaulted.
Following this, a federal judge ordered the bank to stop asset sales, but Fidelity disregarded the order and went ahead and sold some of the properties to Sagecom for N350 million.
Justice Jummai Hannatu Sankey, in her concurring opinion, described Fidelity’s actions as “a deliberate disregard” for court authority and Sagecom’s rights.
Fidelity bank is expected to contest the final calculation during a scheduled court hearing today May 19, however insiders say that changes are unlikely. The Lagos High Court had originally decided in 2011 that Fidelity owed Sagecom compensation for years of lost rental income on the disputed properties.
Join Our Social Media Channels:
WhatsApp: NaijaEyes
Facebook: NaijaEyes
Twitter: NaijaEyes
Instagram: NaijaEyes
TikTok: NaijaEyes
