In the high-stakes world of banking, mergers and acquisitions are meant to catalyze growth, efficiency, and innovation. Yet, behind the sleek business models and promising forecasts, such transitions often carry unforeseen challenges—most of which emerge from the complex web of inherited liabilities. One such challenge has surfaced for Fidelity Bank Plc, Nigeria's sixth-largest lender by assets, embroiled in a legal struggle over a loan issued more than two decades ago.

In recent days, panic has gripped many Nigerians with accounts at Fidelity Bank following widespread claims on social media that the bank has been ordered to pay ₦225 billion in damages. The fear is that the bank could crash or be forced into foreclosure, putting depositors’ money at risk. While the article does not seek to support or refute any specific claims, it is important to note that both Fidelity Bank and the Central Bank of Nigeria (CBN) have publicly denied the existence of such a judgment.

The Genesis of the Dispute

The story begins in 2002, when FSB International Bank, Fidelity's predecessor, granted a $3 million loan to G. Cappa Plc, a prominent construction company in Nigeria. The loan was secured against a property located in Victoria Island, Lagos—an area now considered one of the most coveted real estate hubs in Africa. However, G. Cappa’s failure to repay the loan set the stage for a complex and protracted legal battle that would span over 20 years.

What is G. Cappa?

G. Cappa Plc is a long-standing construction firm in Nigeria, involved in numerous high-profile infrastructure and real estate projects. Despite its prominence, the company defaulted on the $3 million loan, prompting legal proceedings that have persisted for decades.

What is Sagecom Concepts Limited?

Sagecom Concepts Limited is a real estate investment company that became involved in the case in 2011, after seeking legal ownership of a high-value mortgaged property originally tied to a $3 million loan defaulted on by G. Cappa Plc. The property in question is situated in the Ikoyi/Victoria Island area of Lagos—one of the most commercially valuable and strategically located corridors in Nigeria. Following a ruling in its favor by the Federal High Court, Sagecom was permitted to purchase the foreclosed property. However, complications arose when G. Cappa refused to vacate the site or acknowledge the sale, despite the legal directive.

The legal deadlock continued until 2018, when the Lagos State High Court ruled that Sagecom was the rightful owner and ordered G. Cappa to vacate the property. This decision was later affirmed by the Supreme Court, effectively cementing Sagecom’s ownership rights. By that time, however, FSB International Bank had already merged with Fidelity Bank, transferring not only its assets but also the outstanding legal and financial obligations linked to the loan and the property.

The Financial Implications

As the inheritor of FSB’s legacy, Fidelity Bank initially estimated its liability at around ₦14 billion, based on a 2005 exchange rate. However, a Supreme Court ruling in an unrelated case (Anibaba v. Dana Airlines) changed the standard for converting foreign currency judgments—requiring the rate at the time of the trial court's ruling to be used. For Fidelity, this shifted the applicable rate to 2018, effectively increasing its estimated liability to nearly ₦30.7 billion.

Despite this recalculation, Fidelity maintains that the bulk of the debt remains the responsibility of G. Cappa. Nonetheless, the case remains significant due to the potential precedent it sets regarding inherited liabilities in mergers and acquisitions.

Alleged Media Misrepresentation

The situation escalated when the People's Gazette published a report claiming that the Supreme Court had ordered Fidelity Bank to pay ₦225 billion, a headline that quickly went viral. The resulting panic led to concerns about the bank’s solvency, with some depositors fearing a bank collapse or potential loss of their funds.

Fidelity Bank strongly refuted claims that it owed ₦225 billion, stating that the judgment had been misrepresented and that the figures circulating online were grossly inaccurate. The bank further accused the media outlet behind the report of breaching a court order that prohibited all parties from making public statements about the ongoing case.

Echoing this position, the Central Bank of Nigeria (CBN) issued a public statement on May 19, 2025, aimed at calming rising fears—though it did not name Fidelity Bank directly. The CBN noted:

“The attention of the Central Bank of Nigeria (CBN) has been drawn to certain publications and social media reports containing misleading information regarding the operations of a regulated financial institution.

The CBN wishes to categorically reassure the public, depositors, and stakeholders that the Nigerian banking sector remains resilient, safe, and sound.”

Broader Implications for the Banking Sector

This case underscores the complexity and risk banks face when inheriting unresolved liabilities through mergers and acquisitions. It raises important questions: What happens when the financial ghosts of a predecessor threaten to haunt the acquirer? And how should liability be allocated fairly among parties?

While Fidelity’s quick legal and public responses signal a proactive stance, the case is a stark reminder of how legacy issues can linger for decades—long after balance sheets have been merged and new strategies launched.

Moreover, the public reaction to viral misinformation reflects a broader issue: how fast-moving social media narratives can disrupt confidence in financial institutions. This incident may serve as a cautionary tale for media outlets, regulators, and banks alike about the power—and danger—of unchecked information.