Ecobank haunted by $165m fraud saga and drawn-out legal war

When Nedbank confirmed in August that it would sell its 21.2% shareholding in Ecobank Transnational Incorporated (ETI) to Bosquet Investments for $100-million, it marked the end of a 17-year partnership between two of Africa’s largest banking names.

The South African lender described the decision as a natural conclusion of its strategic review. Chief executive Jason Quinn praised ETI’s professionalism, saying the sale marked the end of “a significant chapter” in their history and aligned with Nedbank’s focus on core growth areas in southern and East Africa.

However, as Ecobank adjusts its ownership and direction, stories emerging from inside its network shed light on the challenges the bank has been facing – among them, a costly fraud that began with rice shipments that never arrived and a continuing legal fight in Lagos and Dubai.

In 2014, Ecobank Nigeria thought it was entering a straightforward trade finance deal. Its client, Indian businessman Prem Garg, was no stranger to controversy. Court filings in India, Dubai and Nigeria would later tie Garg and his companies to a string of fraud allegations.

Ecobank issued letters of credit to finance Garg’s rice imports to Nigeria, but the consignments never arrived. The bank’s losses eventually reached about $165-million, with $42.5-million tied directly to the two transactions at the centre of this controversy. 

Unable to recover the money from Garg himself, Ecobank set its sights on an intermediary in the transaction, Wilben Trade. Legal action in Nigeria and Dubai has pitted Wilben Trade, a commodities firm based in the United Arab Emirates (UAE) and led by chairman and CEO Marcus Wade, against ETI and its Nigerian subsidiary.

In late 2014, Ecobank Nigeria enlisted Wilben Trade to act as a financial intermediary for Garg’s imports. The arrangement seemed simple. Ecobank issued letters of credit to Wilben Trade, which discounted them through its banking partners and paid Garg’s supplier because, Ecobank told Daily Maverick, it is not licensed to engage in commodity trading.

Between November 2014 and February 2015, Wilben Trade facilitated two such transactions worth $42.5-million, earning a fee of $83,797. But the ships carrying the rice never arrived. Nigerian port records revealed no docking. The shipping receipts were forged. Worse still, Ecobank later discovered that the suppliers being paid were controlled by Garg and his family.

Maintaining innocence

Wilben Trade maintains it was acting as a third party between Garg and Ecobank. But Ecobank insists that it was not a party to the trading arrangements between Wilben Trade, Garg’s companies Agrico Agbe and Little Rose, or any other entity. It told Daily Maverick that its sole role “was to provide banking services in accordance with international trade practice”.

Ecobank went after Garg. Between 2015 and 2018, it filed fraud complaints in Nigeria, secured a ruling against Garg in Dubai’s International Financial Centre, which was later overturned, and even lodged a criminal case in India against Garg and his relatives involved in the scheme.

However, by the time the fraud was detected, Garg had already vanished and Ecobank was unable to recover anything.

According to Wilben Trade’s legal team, an internal Ecobank review later cleared the firm of wrongdoing, and business between them resumed.

In 2020, Ecobank approved a $100-million credit facility for Wilben Trade. The first letter of credit, worth $10-million, was processed successfully in December 2020. To Wilben Trade, this was proof that Ecobank had acknowledged its innocence regarding the earlier claim against Garg.

Things turned sour in 2022. Ecobank’s recovery arm, ETI Specialized Resolutions Company, led by managing director Oladele Alabi, filed a criminal complaint in Nigeria accusing Wilben Trade and CEO Wade of conspiracy and fraud linked to the 2014 Garg 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,” Ecobank told Daily Maverick.

Stunned, Wilben Trade says the allegations were identical to those it had been cleared of years earlier.

Access Bank precedent

It wasn’t the first time Wilben Trade found itself caught in a Garg-related mess. In 2015, another Nigerian lender, Access Bank, was defrauded through similar transactions, said Babajide Ogundipe, Wilben Trade’s legal counsel in Nigeria. Garg had defrauded Access Bank in a steel import deal.

The bank initially included Wilben Trade in its fraud complaint. But after reviewing the matter, it dropped all charges in 2022.

According to Ogundipe, Ecobank misread this. “While Wilben was negotiating with Access, Ecobank had their people in court observing what was going on,” he 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.”

Wilben Trade argues that the move was tactical: civil claims were time-barred by a statute of limitations. The only remaining lever was a criminal charge. The firm also claims no investigation was carried out. Instead, Nigerian police simply forwarded its documents to Ecobank’s lawyer.

Ogundipe says Nigerian fraud cases often proceed with minimal inquiry by the police. “They receive the complaint and they go to the person against whom the complaint has been made. If they can get their hands on the person, they will take them into custody, sit them down and say, ‘Make a statement.’ ”

He says prosecution in such cases is often resolved only when it concerns people in power, whereas other cases move slowly or stall. Judges frequently don’t turn up for hearings, so it’s common for cases to be postponed until they are thrown out.

Counterclaims

Wilben Trade countered with a civil claim against Ecobank in Dubai in December 2024, seeking nearly $68-million in damages for lost profits, reputational harm and emotional distress. Its legal team explained that the claim was filed in Dubai as Wilben Trade is based in the UAE, which is where the “damage” occurred.

Ecobank accused the firm of refusing to appear in Nigerian court and has instead pursued civil actions abroad, engaging in a “negative media campaign in an attempt to stall or avoid prosecution”.

Wilben Trade alleges that this case amounts to extortion. Wade claimed that in an April 2023 call, Alabi said he was under pressure to recover funds from a $500-million eurobond payment due in 2024 and that if Wilben paid the $42-million Ecobank had lost, it would withdraw the case.

Wade detailed these allegations in letters to Ecobank group CEO Jeremy Awori and the ETI board, but says no action was taken.

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

Throughout the legal storm, the original fraudster remains elusive. Garg, his son Devashish and other relatives allegedly used forged documents and police influence to defraud Access Bank and Ecobank. At one point, they were placed on Interpol’s wanted list, but a Nigerian court ordered their removal in 2019, Nigerian media reported. Despite criminal complaints Ecobank filed in Nigeria, India and the UAE, no recovery has been made and no convictions secured.

The dispute has raised questions about governance at Ecobank. Wilben accuses ETI of failing to disclose the $67.8-million Dubai claim in its 2024 annual report. Auditors Deloitte, approached by Wilben, declined to comment, citing confidentiality.

Ecobank Nigeria continues to face significant pressure at home because of a sustained breach of its capital adequacy ratio, problematic loans and significant exposure to foreign exchange risk. These issues have led to a downgrade from credit rating agency Fitch, which said the bank requires “a large capital injection” to restore compliance.

Amid Ecobank’s continuing legal and financial strain, Nedbank’s well-timed departure feels neatly aligned with changing winds. Nedbank says its divestment was driven by strategy, yet the turbulence surrounding Ecobank hints at why the moment to move on may have felt right.

More than a decade after the phantom rice shipments, little has been resolved. Ecobank has won the appeal in Dubai but Wilben Trade is considering further legal action. What began with forged shipping receipts has grown into a test of how African banking institutions navigate fraud and accountability. DM

This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.