Court has nullified CBN dissolution of Union Bank Board and ordered reinstatement of management.
NewsOnline Nigeria reports that Justice Chukwujekwu Aneke of the Federal High Court in Lagos has ruled that the Central Bank of Nigeria (CBN) acted beyond its statutory powers in dissolving the board and management of Union Bank of Nigeria Plc, declaring the January 2024 intervention unlawful.
Delivering judgment on Wednesday in Suit No: FHC/L/MISC/1377/2025, the court held that the apex bank’s actions were ultra vires and inconsistent with the provisions of the Banks and Other Financial Institutions Act 2020.
The suit was filed by Titan Trust Bank Limited, Luxis International DMCC, and Magna International DMCC, who claimed to be the ultimate beneficial owners of Union Bank. They challenged the CBN’s decision to dissolve the bank’s board, appoint new management, and commence a recapitalisation process that allegedly diluted their shareholding and excluded them from key decisions.
In his judgment, Justice Aneke nullified the entire regulatory intervention and granted multiple reliefs in favour of the applicants. The court quashed the CBN’s announcement dissolving the board and invalidated all actions taken by the regulator-appointed management.
The court also ordered the immediate reinstatement of the former board and management led by Farouk Mohammed Gumel, while restraining the CBN and other respondents from exercising any governance powers over the bank, including restructuring its share capital or altering its ownership structure.
Additionally, the court halted the recapitalisation process and investor selection programme initiated under the CBN-appointed board.
Beyond statutory issues, the court held that the applicants’ fundamental rights were violated, noting they were sanctioned without a fair hearing despite allegations arising from a purported regulatory examination. It found that their shareholding was reduced from 100 per cent to 40 per cent and that they were excluded from the recapitalisation process without legal justification, describing the actions as evidence of bad faith.
Although the CBN defended its intervention on prudential grounds, citing financial distress at Union Bank, including a negative capital adequacy ratio, a capital shortfall exceeding N224 billion, and high non-performing loans; the court maintained that regulatory powers must be exercised strictly within the law.
On jurisdiction, the court ruled that Section 51 of BOFIA does not shield the CBN from judicial review where it exceeds its authority. It further held that the actions of the CBN-appointed board were subject to judicial scrutiny, describing them as agents of the apex bank.
Justice Aneke also dismissed procedural objections raised by the respondents, ruling that the applicable court rules were directory and not fatal to the case.
The court concluded that the applicants suffered a “continuing injury,” having been excluded from the bank’s management and decision-making processes between January 2024 and December 2025, a period during which significant corporate actions were taken.
On damages, the court acknowledged that the applicants invested $190 million in the bank but held that additional claims could not be granted due to the absence of oral evidence.
