The Federal High Court in Lagos has ruled that the Central Bank of Nigeria (CBN) acted outside its statutory authority in dissolving the board and management of Union Bank of Nigeria in January 2024. The court declared the intervention unlawful and not in line with the Banks and Other Financial Institutions Act.
Justice Chukwujekwu Aneke set aside the dissolution of the bank’s board and invalidated all actions taken by the regulator-appointed management. The court ordered the immediate reinstatement of the former board led by Farouk Gumel and restrained the apex bank from further involvement in the bank’s governance and recapitalisation process.
The suit was filed by Titan Trust Bank Limited and other investors, who said they were excluded from key decisions and that their shareholding was reduced without justification. The court held that their right to fair hearing was breached and found that the regulatory action was carried out in bad faith.
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The Central Bank had defended its move, citing financial distress at the bank, including a capital shortfall and governance concerns. However, the court ruled that even in such situations, regulatory powers must be exercised strictly within the law and remain subject to judicial review.
The CBN says the status of Union Bank remains “unchanged”, noting that it would review the certified true copy of the judgment for appropriate action.
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