Elegbede Abiodun
• Halts ongoing recapitalisation and investor selection processes.
• Says CBN went beyond its statutory powers.
Federal High Court in Lagos has knocked-off the Central Bank of Nigeria’s (CBN) takeover of Union Bank of Nigeria Plc.
Responding, the apex bank said the status of the institution remains “unchanged”, noting that it would review the certified true copy of the judgment for appropriate action.
The regulator assured that it would continue to provide necessary regulatory oversight to ensure the bank operate in a sound, stable and safe manner.
The court ruled that the apex bank acted beyond its statutory powers when it dissolved the bank’s board and management in January 2024.
The court also halted the ongoing recapitalisation and investor selection processes initiated under the interim leadership.
While delivering judgment in suit No: FHC/L/MISC/1377/2025, yesterday, Justice Chukwujekwu Aneke held that the CBN’s intervention breached the provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020 and was therefore unlawful.
The suit was instituted by Titan Trust Bank Limited, Luxis International DMCC, and Magna International DMCC entities that identified themselves as the ultimate beneficial owners of Union Bank.
They challenged the dissolution of the board, the appointment of a new management team, and the recapitalisation process that followed, alleging that the exercise diluted their shareholding and excluded them from key corporate decisions.
In the judgment, the court nullified the entire regulatory intervention. It set aside the public announcement dissolving the board, invalidated all actions taken by the CBN-appointed management, and ordered the immediate reinstatement of the former board and management led by Mr Farouk Mohammed Gumel.
Justice Aneke also issued an order restraining the CBN and other respondents from exercising any powers over the bank’s governance, including the restructuring of its share capital or altering its ownership structure.
Justice Aneke also dismissed procedural objections raised by the respondents, describing the relied-upon court rules as merely directory and not detrimental to the suit.
On the issue of damages, the court acknowledged the respondents’ admission that the applicants invested $190 million in the bank but declined to award additional compensation in the absence of oral evidence.
