Court Imposes N112 Million Fine on Union Bank for Fraudulent Sale of Ikoyi Property
A Lagos High Court has imposed a N112,050,000 judgment against Union Bank Plc for the wrongful sale of a property located at No. 6, Moore Road, Ikoyi, Lagos State, which was sold at a significantly undervalued price of N60 million.
The judgment was delivered by Justice I.O. Harrison in a case filed by Mrs. Olubunmi Ogunde, Yewande Ogunde, and others, with Union Bank of Nigeria Plc named as the sixth defendant in the suit, marked LD/2624/1999. The case, initially concerning loan and mortgage disputes, commenced in 1999 and was later amended by the claimants in 2017.
According to the court's judgment dated May 31, 2024, Yewande Ogunde testified that on September 18, 1998, her late husband obtained a N4 million loan from the bank to develop a property comprising eight four-bedroom flats, a penthouse, a ten-bedroom family house, and a three-story building with three-bedroom flats on a 2.2-acre plot at 6 Moore Road, Ikoyi, Lagos. Due to disagreements among the beneficiaries and executors of the deceased’s estate, the loan was not serviced, leading to the bank’s sale of the property for N60 million.
Counsel for the claimants, O.V. Ekundayo, argued that the sale was conducted in bad faith and at a grossly undervalued rate, urging the court to award damages. Priscilla Esede, a representative of Union Bank, contended that the bank followed due process in debt recovery, valuing the property at N60 million and selling it to Mr. Cletus Ibeto and others through the law firm Shade Ogundare & Co. She explained that the sale was conducted privately at the request of the executors instead of via public auction.
However, Justice Harrison found that the property was grossly undervalued, with market research indicating that similar properties should have been sold for N112,050,000, as evidenced by court exhibits. The judge concluded that the significantly low sale price was indicative of fraud and declared the sale conducted by the bank as being in bad faith and at a gross undervalue.
The court awarded N112,050,000 in damages to the claimants, excluding the N60 million already paid, reflecting the difference between the actual and appropriate sale value of the property. Interest on the balance will accrue from 1998 until the judgment date at the prevailing CBN rate, and thereafter at 10% per annum until the judgment debt is fully paid.
This ruling remains in effect unless overturned by the Court of Appeal or the Supreme Court in further legal proceedings.
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