Oil services company Zumax Nigeria Limited has filed a N4.1 billion lawsuit against the Central Bank of Nigeria (CBN), alleging gross negligence and complicity in what it describes as a fraudulent receivership imposed by the apex bank.
The suit, filed at the Federal High Court in Lagos, accuses the CBN of failing in its regulatory duty to supervise banks and protect customers’ interests, a lapse that Zumax claims led to severe financial losses and the collapse of its business.
At the hearing on Tuesday, before Justice Akintoye Aluko, Zumax’s counsel, Chief Wole Olanipekun (SAN), urged the court to hear the plaintiff’s February 20, 2025, application, arguing that both the plaintiff’s request and the CBN’s preliminary objection should be consolidated and heard together.
However, CBN’s counsel, Adeleke Agboola (SAN), opposed the motion, insisting that the court must first address the apex bank’s preliminary objection, which challenges the court’s jurisdiction over the case.
“This preliminary objection has priority over any other applications. The Plaintiff’s application is not meritorious. 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.”
In response, Olanipekun argued:
“It is the court that can make any pronouncement on the merit of our application. 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.”
After hearing arguments from both sides, Justice Aluko adjourned the case to April 22, 2025, for a ruling on which application should be heard first.
According to court documents, Zumax held an account (No. 0101020000026) with the now-defunct IMB International Bank PLC, which later merged with First City Monument Bank (FCMB).
Zumax claimed it initially obtained a N50 million overdraft facility from IMB, which was later increased to N200 million in 1998. However, the company alleged that the bank fraudulently inflated its debt, which by December 6, 2002, had allegedly ballooned to N465.6 million—a claim Zumax strongly disputes.
The oil services firm further accused FCMB’s former Managing Director, Edwin Chinye, of unlawfully taking control of its foreign currency earnings held in a JP Morgan Bank account through Redsear Limited, a sister company of FCMB.
“The bank misappropriated $4 million 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 to 2022, allegedly led to the collapse of Zumax’s business, the loss of contracts with multinational oil companies such as Chevron, and financial ruin.
The company claimed that despite repeated petitions to the CBN, the apex bank failed to investigate FCMB’s actions or intervene to prevent the alleged financial mismanagement.
Zumax further argued that a 2007 CBN report confirmed it had paid over N547 million to FCMB, proving that the company was never actually in debt to the bank. Additionally, in December 2021, the Court of Appeal ruled that the consent judgment upon which the receivership was based was fraudulent and should be set aside.
In its lawsuit, Zumax is seeking a court declaration that the CBN failed in its regulatory duty to oversee Nigerian banks and prevent financial mismanagement.
$41 million in special damages, covering lost income and asset depreciation.
N2 billion in general damages.
N2 billion in exemplary damages.
N100 million in legal costs.
With the April 22 ruling set to determine the next phase of the case, all eyes are on the court’s decision regarding which application—Zumax’s claims or CBN’s objection—will be heard first.
