Toba Owojaiye reporting
Abuja, Nigeria
Fidelity Bank Plc, one of Nigeria’s leading financial institutions, is grappling with a crippling N225 billion damages judgment delivered by the Supreme Court on April 11, 2025.
The apex court ruled in favor of Sagecom Concept Ltd, a relatively obscure Ibadan-based general services firm, concluding a 20-year legal battle rooted in asset sales gone awry.
Truth Live News gathered that the dispute originated in the early 2000s when G. Cappa Plc, a construction and engineering company, secured loans using its assets as collateral from FSB International Bank.
Following the 2005 consolidation of the Nigerian banking sector, Fidelity Bank acquired FSB’s loan book — including the G. Cappa portfolio.
A federal court had issued an injunction barring the sale of G. Cappa’s assets, pending the resolution of legal disputes.
Despite the injunction, Fidelity sold the assets to Sagecom Concept Ltd.
Sagecom, unaware of the legal restrictions, purchased the assets using borrowed funds.
Unable to take possession due to the standing injunction, Sagecom sued for damages, claiming economic losses and breach of trust.
The case traversed various levels of the judiciary for over two decades before the Supreme Court’s final ruling.
Delivered by Justice Adamu Jauro, the unanimous decision condemned Fidelity Bank for flouting judicial authority.
The court held the bank liable for:
Deliberate violation of a subsisting injunction.
Depriving Sagecom of economic benefits from the disputed assets.
Attempting to escape liability through acquisition technicalities.
“No entity should profit from contempt of court. Fidelity’s conduct undermines the rule of law,” Justice Jauro emphasized.
The court upheld the damages awarded by lower courts.
Lagos State High Court’s Judge Olabisi Akinlade pegged the compensation at $139 million (N225 billion), referencing the May 2025 exchange rate.
Though Fidelity reported N385 billion pre-tax profit in 2024, most of it came from interest income on rolled-over loans — not from liquid assets.
The court’s payment timeline could force Severe liquidity issues, Potential asset divestments or shareholder dilution and
a bailout or regulatory rescue by the Central Bank of Nigeria (CBN).
A Fidelity official disclosed anonymously: “This is the biggest crisis the bank has ever faced. The liability is simply too big.”
Talks are underway between Fidelity and Sagecom to spread repayment, but with no commitment yet on restructuring.
The CBN is closely monitoring the situation amid concerns of systemic risk, especially given Nigeria’s fragile macroeconomic climate.
No commercial banks or financial consortia have volunteered to underwrite or absorb the liability.
This case may lead to Revisions in bank asset sales oversight.
Reinforcement of compliance mechanisms around court injunctions.
Pressure on Nigeria Deposit Insurance Corporation (NDIC) to reassess contingency protocols.
Investors & Partners may hesitate to inject capital or partner with Fidelity until the liability is settled or restructured.
Depositors may fear risk of panic withdrawals depending on Fidelity’s next moves.
Other banks may tighten asset-backed lending or conduct compliance audits to avoid similar liabilities.
Stockholders are likely to suffer share value erosion unless a swift resolution emerges.
Fidelity Bank has denied wrongdoing, insisting its actions were guided by CBN regulatory frameworks.
Sagecom and G. Cappa remain unavailable for official comment.
Fidelity’s legal team plans to challenge the damages calculation — though experts believe the outcome is unlikely to change.
This case not only underscores the perils of judicial defiance in asset transactions but also opens broader questions about due diligence within Nigeria’s banking consolidation history. The coming weeks will be pivotal as regulators, investors, and the public await how Fidelity plans to weather the storm.