The Federal High Court in Lagos has ruled that the Central Bank of Nigeria acted beyond its legal powers in dissolving the board and management of Union Bank of Nigeria, declaring the January 2024 intervention unlawful.
The court also nullified the entire regulatory action, including the recapitalisation process carried out by the CBN-appointed interim board.
Delivering judgment on Wednesday in a suit marked FHC/L/MISC/1377/2025, Justice Chukwujekwu Aneke held that the apex bank’s actions were ultra vires and failed to comply with the provisions of the Banks and Other Financial Institutions Act 2020.
According to court documents, Titan Trust Bank Limited, alongside Luxis International DMCC and Magna International DMCC, 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 initiate a recapitalisation process which allegedly diluted their shareholding and excluded them from key decisions.
In his ruling, the judge nullified the entire intervention and granted the reliefs sought by the applicants. He also set aside the CBN’s public announcement dissolving the board and invalidated all actions taken by the regulator-appointed management.
The court further ordered the immediate reinstatement of the former board and management led by Farouk Gumel.
Additionally, Justice Aneke restrained the CBN and other parties from exercising any control over the bank’s governance, including restructuring its share capital or altering its ownership structure. The ongoing recapitalisation and investor selection process initiated under the interim board was also halted.
On the issue of fair hearing, the court ruled that the applicants’ fundamental rights were violated, noting they were sanctioned without being given an opportunity to respond to allegations stemming from a regulatory examination of the bank.
The judge observed that the applicants’ shareholding had been reduced from 100 per cent to 40 per cent and that they were excluded from the recapitalisation exercise without legal justification, describing the situation as evidence of bad faith.
Although the CBN defended its actions as part of its regulatory oversight citing financial distress at the bank, including a negative capital adequacy ratio, a capital shortfall exceeding N224 billion, and a high level of non-performing loans, the court maintained that such powers must be exercised strictly within the law.
On jurisdiction, the court clarified that Section 51 of BOFIA does not shield the CBN from judicial review where it exceeds its statutory authority. It also ruled that the actions of the CBN-appointed board were subject to scrutiny, as they acted as agents of the apex bank.
The court dismissed procedural objections raised by the respondents, stating that such rules were not sufficient to invalidate the case.
Justice Aneke also held that the applicants suffered a “continuing injury,” noting their exclusion from the bank’s management and decision-making between January 2024 and December 2025, a period during which significant corporate decisions were made.
On damages, the court acknowledged that the applicants had invested $190 million in the bank but declined to award additional compensation due to the absence of oral evidence.
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