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, filed before the Federal High Court in Lagos, Zumax claimed that the CBN failed in its statutory duty to supervise banks and protect customers’ interests.
The Plaintiff was a visible player in the oil services industry and was regularly engaged by the oil majors like Shell Explorations Limited and Chevron Limited, and from which jobs it earned regular substantial incomes in US Dollars.
At the hearing of the matter on Tuesday before Justice Akintoye Aluko, counsel to the plaintiff, Chief Wole Olanipekun (SAN), told the court that the Plaintiff (Zumax) had an application dated February 20, 2025, and urged the court to hear the application.
Olanipekun further prayed the court to allow him move the application as the defendant had responded. He also told the court that the Plaintiff and defendant’s preliminary objection can be consolidated and heard together.
Olanipekun further requested the court to consolidate and hear both the plaintiff’s application and the CBN’s preliminary objection together.
He argued that there was no conflict over which should be heard first, as the plaintiff had not objected to the court considering the CBN’s preliminary objection.
However, CBN’s counsel, Adeleke Agboola (SAN), maintained that the defendant’s preliminary objection – which challenges the court’s jurisdiction – should take precedence.
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 determined 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 which 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 held an account (No. 0101020000026) with the defunct IMB International Bank PLC, which was later merged into First City Monument Bank (FCMB).
The plaintiff initially obtained a N50 million overdraft facility from IMB, which was later increased to N200 million in 1998.
However, Zumax alleged that the bank fraudulently inflated its debt, and by December 6, 2002, claimed the debt had risen to N465.6 million – a claim Zumax vehemently disputed.
Zumax further accuses FCMB’s former Managing Director, Edwin Chinye, of taking control of its foreign currency earnings held in a JP Morgan Bank account through Redsear Limited, a sister company of FCMB.
Zumax contends that FCMB, under its former Managing Director, 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 $4m 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 without 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 N547m, 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, for a court declaration that the CBN was negligent in its duty to regulate Nigerian banks.
It’s also asking for special damages amounting to $41m, including lost income and asset depreciation; general damages of N2 billion, exemplary damages of N2 billion and legal costs amounting to N100m.
Wale Igbintade
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