E-Financial
Zumax Files N4.1Bn Suit against CBN over ‘Fraudulent’ Receivership
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, which is before the Federal High Court, Lagos, Zumax claimed that the CBN failed in its statutory duty to supervise banks and protect customers’ interests.
At the hearing of the matter on Tuesday before Justice Akintoye Aluko, Chief Wole Olanipekun (SAN) told the court that the Plaintiff (Zumax) had an application dated February 20, 2025, asking the court to hear the application.
He urged the court to allow him to move the application as the defendant had responded.
Olanipekun also told the court that the Plaintiff and defendant’s preliminary objections can be consolidated and heard together.
He stated that the priority of which application to be heard first shouldn’t arise as the Plaintiff has not opposed the hearing of CBN’s preliminary objection.
But Adeleke Agboola (SAN), counsel, counsel, told the court that the defendant has a preliminary objection in the suit, which commenced as a writ of summons challenging the jurisdiction of the court.
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 determining 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 that 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 had and maintained its account with the defunct IMB International Bank Plc., which, under several mergers and consolidations of banks, ultimately fused into the much larger banking institution known as First City Monument Bank (FCMB).
The Plaintiff said it obtained a facility from IMB International Bank, an overdraft facility of N50m, which was later increased to N200m in/or at the first half of 1998.
However, the bank allegedly inflated the company’s debt and, by December 6, 2002, claimed it had risen to N465.6 million, the claim which was vehemently disputed by Zumax.
Zumax contends that FCMB, under its former Managing Director Edwin Chinye, 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 $ 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 until 2022, led to severe financial losses, including the collapse of Zumax’s business and the loss of contracts with 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 N547 million 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 a court declaration that the CBN was negligent in its duty to regulate Nigerian banks.
It’s also asking for special damages amounting to $ 41 million, including lost income and asset depreciation; general damages of N2 billion, exemplary damages of N2 billion, and legal costs amounting to N100 million.
But the CBN’s preliminary objection is challenging the jurisdiction of the Court to hear the matter.
The next currency crisis could accelerate the shift of the roughly $315 billion global stablecoin market into a digital-dollar alternative for citizens in emerging economies, notably in regions like sub-Saharan Africa and Latin America.
As local fiat currencies face devaluation and high inflation, citizens and businesses are increasingly utilizing smartphone-based stablecoins (such as USDT and USDC) as hedges and primary mediums of exchange.
According to the International Monetary Fund (IMF), the rapid adoption of dollar-linked digital assets—particularly in countries heavily affected by inflation like Nigeria—poses significant risks to monetary sovereignty.
With up to 95% of surveyed individuals in some African markets preferring to receive payments in stablecoins over local fiat, the rising volume of these decentralized, cross-border channels weakens domestic currency demand and dilutes the effectiveness of local monetary policy.
IMF observed in a report titled “Stablecoins in Nigeria: A Growing Cross-Border Channel” noted that the widespread use of stablecoins poses risks to monetary sovereignty, particularly as more individuals and businesses turn to digital dollar-linked assets for savings and transactions.
Nodding in agreement is Future Investment Initiative Institute (FII Institute), a non-profit organisation run by the Public Investment Fund, Saudi Arabia’s main sovereign wealth fund.
FII Institute said that central banks face structural challenges.
And according to the institute, when citizens move savings out of national banks and into private digital wallets, conventional capital controls lose their grip.
Institutions like the Bank for International Settlements warn that interest-bearing stablecoins compete directly with domestic-currency deposits, complicating financial oversight and making smartphone-based transfers incredibly difficult for authorities to monitor.
In Nigeria, Naira depreciation has pushed users toward dollar-stablecoins, according to report by Gino Matos in cryptoslate.com.
A stablecoin is a type of cryptocurrency designed to maintain a steady value by pegging its price to a reserve asset, such as a fiat currency (e.g., the U.S. dollar) or a commodity (e.g., gold).
They act as a bridge between traditional money and the digital asset world, providing the speed of crypto without the extreme price swings of assets like Bitcoin.
Federal government has reopened three federal government of Nigeria (FGN) bond issues valued at N1.2 trillion for subscription as part of efforts to raise long-term funds from the domestic debt market.
The Debt Management Office (DMO), which announced the offer on Tuesday, said the three reopened bond issues are each valued at N400 billion.
According to the DMO, the first offer is the January 2035 FGN Bond, a 10-year reopening, carrying an interest rate of 22.60 per cent per annum.
The second is the May 2028 FGN Bond, a 15-year reopening, with a coupon rate of 15.45 per cent per annum, while the third is the June 2037 FGN Bond, a 20-year reopening, also valued at N400 billion.
The office said the bond auction is scheduled for July 20, while successful subscriptions will be settled on July 22.
It explained that the bonds are offered at N1,000 per unit, with a minimum subscription of N50 million and additional investments in multiples of N1,000.
For the reopened bonds, the DMO said successful bidders would pay a price based on the yield-to-maturity that clears the auction, in addition to any accrued interest on the instruments.
Interest on the bonds will be paid every six months, while the principal will be repaid in full on the respective maturity dates.
The DMO reaffirmed that FGN bonds are backed by the full faith and credit of the Federal Government and constitute obligations chargeable on the general assets of the federation.
It added that the bonds qualify as trustee investment securities under the Trustee Investment Act and enjoy tax exemptions for eligible investors, including pension funds, under the Company Income Tax Act and Personal Income Tax Act.
The bonds are listed on the Nigerian Exchange (NGX) and FMDQ Securities Exchange and also qualify as liquid assets for banks in computing their liquidity ratios.
FGN bonds are long-term debt instruments through which investors lend money to the Federal Government in exchange for periodic interest payments and repayment of the principal at maturity.
Gigbanc, Nigerian fintech startup, has announced it is winding down operations, after three years, citing a tough fundraising climate.
Paul Omoregie Okundaye, and Babatope Oni, co-founders of Gigbanc
The company, which set out to build cross-border financial infrastructure for African freelancers, creators, entrepreneurs and businesses, confirmed the decision in a statement signed by its co-founders.
“After careful consideration, Gigbanc’s leadership has made the difficult decision to wind down operations,” the company said, adding that the move “reflects the broader funding environment affecting early stage startups in Africa, a challenge that has been widely documented across the ecosystem.”
Since its founding, Gigbanc grew a community of more than 150,000 people across multiple countries and processed over $7.28 million (N10 billion) in payment volume, helping thousands of users receive their first international payment.
The company also ran conferences, fellowships and community events aimed at connecting entrepreneurs and creators across the continent.
`Despite the shutdown, Gigbanc said it is not walking away emptyhanded.
The company disclosed that it is in active acquisition discussions with a prominent financial infrastructure firm, with further details to be shared once the process closes.
Paul Omoregie Okundaye, co-founder and CEO, and Babatope Oni, co-founder and CTO, framed the closure as the end of a chapter rather than the erasure of Gigbanc’s impact.
“While Gigbanc is winding down operations, we don’t see this as the end of what we built together. Instead, we see it as the completion of an important chapter,” the founders said. “The relationships, lessons, community, and impact we’ve created will continue to outlive the company itself.”
The founders thanked users for their trust throughout the company’s run, citing everything from transactions and feature requests to bug reports and criticism as forces that shaped the product
“We leave this journey incredibly proud. Proud of our team, who gave everything they had.
Proud of the community that rallied behind us,” they said.
Gigbanc’s exit adds to a growing list of African startups that have shut down or scaled back operations in recent years as venture funding on the continent has tightened, with founders increasingly citing capital scarcity as the primary driver behind closures and consolidations.
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