First Bank of Nigeria has initiated legal proceedings to recover substantial sums of money allegedly embezzled by an employee.

The bank, which boasts a market capitalization of ₦829 billion, reported the incident to the Nigerian Police Force on March 25, 2024, and subsequently obtained multiple court orders to freeze accounts linked to the stolen funds.

The employee—who is currently at large—is accused of transferring those monies to 98 bank accounts—including his wife’s—that were identified as first beneficiaries.

The bank received three court orders between April 4–8, 2024, to block hundreds of bank accounts that were allegedly receiving the stolen funds after reporting the incident to the Nigerian Police Force on March 25, 2024.

While the initial amount found to be diverted was approximately ₦12 billion, three people with direct knowledge of the incident told TechCabal that it currently stands at approximately ₦40 billion ($29 million).

According to a First Bank employee with knowledge of the situation, the employee, named in court documents as Tijani Muiz Adeyinka, was authorized to handle customer reversals in her capacity as a manager on the electronic products team. It implied that he was in charge of an account from which he could credit merchant accounts and process those reversals.

Instead, Muiz allegedly used that power to credit customer requests for reversals to a merchant under his control. He purportedly did not require any additional authorizations because he was the team’s final line of authorization, which allowed him to continue misappropriating client funds for nearly two years without being discovered.

His plot was eventually uncovered when a client filed a complaint, which was then forwarded to the internal control department of the bank. After identifying multiple questionable transactions, the control unit informed the authorities.

“We hereby bring to your notice the discovery of fraudulent transactions into various transactions within and outside the bank and request your good offices to set up the machinery of investigation in place with a view to unravel the circumstances surrounding the said fraud and get the culprits apprehending to face the wrath of the law,” read a letter dated May 10, 2024, from First bank to the Lagos State Commissioner of Police.

First Bank ignored TechCabal’s repeated calls and emails asking for comments.

An inquiry for comments was not immediately answered by a Nigerian Police Force spokesperson. An inquiry for comments was not answered by the Economic Financial Crimes Commission (EFCC) spokesperson.

“I discovered that one Muiz Tijani Adeyinka, a former staff of First Bank was involved in the nefarious posting of fraudulent transactions,” read a statement from the investigating Police officer in charge of the case signed March 26, 2024.

“It was discovered that he made some fraudulent transactions to his wife’s account number (name withheld) domiciled with Zenith Bank, which in turn transferred to other beneficiaries totaling thirty-four accounts which also gave birth to second beneficiaries domiciled with other banks totaling 1,190 accounts,” the statement added.

First Bank did not disclose the amount of money that was stolen in any of the numerous court filings or complaints.

Along with requesting that the Police “unravel the circumstances surrounding the fraud,” it remained silent on how the money was acquired.

Fraud is still a major problem in Nigeria’s financial services sector, even though there was a decrease in cases reported in Q1 2024.

The largest banks in the nation are frequently the target of fraud attacks, despite fintech startups receiving disproportionate attention.

In a bid to help grow the savings habit of Nigerians and promote financial inclusion, Baobab Microfinance Bank has launched its digital savings offering, the Jollof+ app, which allows customers to earn up to 24% per annum on their savings.

Speaking at the launch of the product in Lagos, Eric Ntumba, the Acting Chief Executive Officer of the bank, described the Jollof+ app as a cutting-edge savings application aimed at mitigating the negative impact of inflation on the savings of Nigerians.

He said, “Inflation in the country has continued to rise, reaching 33.69 per cent in April this year. “Jollof+ helps users combat inflation by providing high-interest savings options. With the inflation rate affecting the value of savings, Jollof+ offers a competitive interest rate that helps users protect their purchasing power even in the face of inflation.”

According to him, customers can get up to 24 per cent interest per annum on their savings, which is currently the highest offering in the Nigerian market, while providing individuals and families with easy access to financial growth and security.

He noted that the offerings, which range from Jollof Flex, JollofLock, Ajo+, and Babybox, ensure that customers can manage their financial activities seamlessly while tracking the progress of their savings habits.

Explaining the offerings, Ntumba said the JollofLock allows users to lock their funds for a specified period, earning a higher interest rate compared to a regular savings account.

“The offering, which pays interest upfront, helps users maximize returns by committing their savings for fixed durations. The Ajo+ is a target savings feature that allows users to save individually or as a group towards achieving a goal while earning up to 18.33 per cent per annum Users of the app can also save for their children’s future through the Babybox feature, earning up to 17.22 per cent per annum in interest, “he explained.

Femi Otedola, chair of FBN Holdings and majority owner of Geregu Power, and some of his companies are up in arms against Zenith Bank over a controversial debt involving his former company, Zenon Petroleum & Gas and some other firms in which he has interests.

Mr Otedola is accusing Zenith Bank of perpetrating banking fraud against him and some of his companies. He claims the lender controversially disposed of his shares in the bank, manipulated the company’s bank accounts, and forged documents to cover up the alleged crimes.

The businessman has also triggered litigation and police action against Zenith Bank, with the Force Criminal Investigation Department now probing the matter.

The battle between Mr Otedola and Zenith Bank began after the businessman accused his bankers of dishonest accounting in the computation of his liabilities before selling his multibillion naira debt to the Asset Management Corporation of Nigeria (AMCON), an agency of the Nigerian Government, buys bad loans in banks’ books, aiming to pursue recovery afterwards.

Reliable sources with knowledge of the matter revealed that the billionaire tycoon turned to the court and the police for a resolution after the dispute became knottier, and efforts to resolve it and other related issues without legal intervention failed.

The technical teams of Zenith Bank and Zenon Oil met on 20 May 2024 to resolve the logjam, but the meeting was inconclusive.

Zenon Oil did not find the deliberations of another meeting held a day after at Lagos Oriental Hotel satisfactory and has threatened to launch a fresh legal action against the bank.

That was the third reconciliation meeting the two parties held this month, none of which has resolved the conflict.

“It is clear that Zenith Bank Plc is not sincere in resolving this issue out of court and as such a time-wasting exercise,” one of our sources said. “At this juncture, we have resolved to pursue our claims via the judiciary, law enforcement, the CBN and the court of public opinion as we know that our claims are very genuine.”

Zenon claimed its letters of credit that deteriorated into the problematic loan acquired by AMCON were opened before the corporation bought the debt in December 2011. Zenon ceased to operate the account the moment the takeover happened.

Zenon claimed Zenith Bank admitted at meetings that it controversially opened letters of credit after AMCON procured the debt, a practice an official of the oil and gas firm described as unprofessional.

A document listed the overdue amount on Zenon’s account at the time of AMCON’s intervention as N39 billion. However, Zenon claims Zenith Bank offered the debt to AMCON for N49 billion instead. After intense negotiations, AMCON paid the bank N44.1 billion for the bad debt.

Sunday Enebeli-Uzor, who heads the bank’s corporate communications unit, did not immediately respond to PREMIUM TIMES’ request for comment.

Neither did Ayoola Kusimo, the team lead for media relations.

But a top bank official had earlier told one of our reporters that since the matter is already in court and before the police, there was no need discussing it in the media.

When contacted, Mr Otedola confirmed his face-off with Zenith Bank over some unclear transactions on his companies’ accounts but declined to provide details. “We are still trying to resolve it,” he said. “If that fails, I can give you details.”

Another document containing the details of a meeting held by both sides on 20 May said Zenith Bank agreed to refund with compounded accrued interest rate the N205 million it wrongly deducted from Zenon’s account using a backdraft.

Seaforce Shipping Company Limited, owned by Mr Otedola, disclosed that Zenith Bank presented some bank statements claiming that Seaforce owed the lender N5.9 billion as of February 2024. The company added that Zenith Bank later abandoned the claim after it showed the bank proof that Seaforce’s account was in credit as of 2018.

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