Timothy Enietan-Matthews

When Nedbank announced in August that it was selling its 21.2% shareholding in Ecobank Transnational Incorporated (ETI) to Bosquet Investments for $100 million, the South African lender described the move as a strategic shift and “the end of a significant chapter” in its long partnership with Ecobank.

Chief executive Jason Quinn noted that the sale was a natural conclusion of Nedbank’s strategic review and aligned with its renewed focus on southern and East Africa, while commending ETI’s professionalism and the partnership that had lasted 17 years.

However, industry watchers have linked the divestment to the difficult headwinds Ecobank continues to face — among them, a costly fraud case dating back to 2014 and protracted legal tussles in Nigeria and Dubai that have strained the pan-African lender’s reputation and resources.

That saga began over a decade ago with a trade finance deal involving Indian businessman Prem Garg. Ecobank Nigeria had issued letters of credit to finance Garg’s rice imports into Nigeria, but the shipments never arrived. The bank later discovered that the transactions — worth about $165 million in total, including $42.5 million from two central deals — were based on forged documents, and that the supposed suppliers were companies linked to Garg and his family.

In an attempt to recover the losses, Ecobank turned its attention to Wilben Trade, a Dubai-based commodities trading firm led by Marcus Wade, which had acted as an intermediary. Ecobank maintained that its “sole role was to provide banking services in accordance with international trade practice,” insisting it was not directly involved in the trading arrangements between Wilben Trade, Garg, or his companies.

Between November 2014 and February 2015, Wilben Trade handled two transactions valued at $42.5 million, earning a modest facilitation fee. But when the rice never arrived, Ecobank’s internal investigation revealed no record of the ships docking at Nigerian ports, and the documentation provided turned out to be forged.

Ecobank subsequently filed complaints in Nigeria, India, and Dubai, pursuing Garg and his companies in multiple jurisdictions. Despite several court actions — including one ruling initially secured in Ecobank’s favour in Dubai that was later overturned — the bank failed to recover its losses, and Garg reportedly vanished.

According to Wilben Trade’s legal representatives, an internal Ecobank review later cleared the firm of wrongdoing, and the two parties resumed business. In 2020, Ecobank even approved a $100 million credit facility for Wilben Trade, and the first transaction under the facility, valued at $10 million, was completed successfully.

But relations soured again in 2022 when Ecobank’s recovery arm, ETI Specialised Resolutions Company, led by Oladele Alabi, filed a new criminal complaint in Nigeria accusing Wilben Trade and its CEO of conspiracy and fraud linked to the same 2014 transactions.

“Following internal investigations, Ecobank discovered evidence that Wilben Trade, in concert with Agrico Agbe, had engaged in fraudulent conduct by diverting funds and failing to deliver the financed products. As a result, Ecobank promptly discontinued all business with the parties, flagged their details within its group, and lodged a petition with the relevant Nigerian authorities,” the bank said.

Wilben Trade, however, insists the renewed charges are a rehash of old allegations from which it had already been cleared. The firm’s Nigerian counsel, Babajide Ogundipe, argues that Ecobank’s actions are based on a misunderstanding of previous settlements involving other banks defrauded by Garg.

“While Wilben was negotiating with Access, Ecobank had their people in court observing what was going on,” Ogundipe said. “When Access reached a settlement with Wilben, it didn’t involve Wilben paying anything. The Ecobank conclusion, it seems, was that Wilben must have paid something.”

In December 2024, Wilben Trade filed a civil claim in Dubai seeking nearly $68 million in damages for reputational harm and lost business opportunities, arguing that Ecobank’s renewed allegations amounted to extortion and malicious prosecution.

Wade alleged that during a 2023 phone conversation, Alabi mentioned pressure to recover funds tied to an upcoming $500 million eurobond repayment, and suggested that if Wilben repaid the $42 million in dispute, the case would be withdrawn.

Ecobank firmly rejected the claim. “All allegations of misconduct or malicious litigation against Ecobank are misconceived, misleading and without foundation,” the bank stated.

The original architect of the fraud, Prem Garg, remains at large. He and his relatives have faced multiple complaints across India, Nigeria, and the UAE, with reports that they once appeared on Interpol’s wanted list before a Nigerian court ordered their removal in 2019.

Meanwhile, Wilben has accused Ecobank of failing to disclose its $67.8 million Dubai counterclaim in its 2024 annual report, a point that neither Ecobank nor its auditors, Deloitte, have commented on.

Ecobank’s broader challenges — including foreign exchange losses, capital adequacy shortfalls, and exposure to high-risk assets — have drawn concern from Fitch Ratings, which recently warned that the bank “requires a large capital injection” to restore full compliance.

Against this backdrop, Nedbank’s well-timed exit appears to coincide with Ecobank’s ongoing efforts to steady itself. While Nedbank maintains its divestment was purely strategic, the enduring legal and operational turbulence at Ecobank underscores the scale of the task before its management team.

Meanwhile many pertinent questions have been left unanswered. Among which is why has EcoBank made no attempt to pursue Wilben for their losses following an internal investigation and report into their $160m losses to Garg in 2015.

Also, it is curious why ETI or its CEO, Jeremy Awori, has not taken action to investigate Mr Alabi or sanction him over allegations of his action, and in light of the issues, why did ETI not disclose material litigation in its end-of-year report for 2024.

More than a decade after the phantom rice shipments, both the Nigerian criminal case and Wilben’s Dubai claim remain unresolved. The episode has evolved into a cautionary tale about how financial institutions across Africa navigate complex cross-border frauds — and how the echoes of a single failed transaction can reverberate for years.