Court Voids CBN Sack of Union Bank Board, Orders Reinstatement

Court Voids CBN Sack of Union Bank Board, Orders Reinstatement

A Federal High Court in Lagos has nullified the decision of the Central Bank of Nigeria to dissolve the board and management of Union Bank of Nigeria, ruling that the action was taken outside its statutory powers.

Delivering judgment on Wednesday, Justice Chukwujekwu Aneke set aside all decisions taken by the CBN-appointed board and directed that the former board and management be restored without delay.

The court also restrained the apex bank and its representatives from taking any further steps regarding the bank’s affairs, including actions linked to the proposed recapitalisation of Union Bank, pending full compliance with due process and applicable laws.

The dispute arose from the CBN’s January 2024 intervention, during which it dissolved the bank’s leadership and installed a new management team, appointing Yetunde Oni as managing director. The regulator had cited concerns over corporate governance and regulatory compliance as reasons for the action.

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However, the move was challenged by the bank’s core shareholders, including Titan Trust Bank and its investment partners, who argued that the intervention breached established legal procedures and undermined shareholder rights.

The plaintiffs contended that while the CBN has supervisory authority over financial institutions under the Banks and Other Financial Institutions Act (BOFIA), such powers must be exercised within clearly defined legal limits and with respect for corporate governance structures.

They further alleged that the dissolution formed part of an attempt to restructure the bank’s ownership and management without due consultation or adherence to statutory provisions.

In an earlier ruling delivered in December 2025, the court granted interim relief restraining further regulatory actions. Wednesday’s judgment, however, provides a final determination, affirming the shareholders’ claims and invalidating the CBN’s actions.

Justice Aneke held that regulatory oversight does not extend to arbitrary dissolution of a bank’s board without following due process. He emphasised that any intervention must comply strictly with the law and respect the rights of shareholders and corporate entities.

The court’s decision effectively restores the pre-2024 leadership structure of Union Bank of Nigeria and nullifies all actions taken by the CBN-appointed management during the disputed period.

Legal analysts say the ruling is a landmark in defining the limits of CBN regulatory powers, particularly in relation to governance interventions in commercial banks. It is expected to influence future regulatory engagements and reinforce the principle of accountability in financial sector oversight.

The judgment also comes at a critical time for Nigeria’s banking industry, where recapitalisation efforts and regulatory reforms are ongoing. Experts note that the decision could prompt a review of how regulatory authorities implement enforcement actions to ensure alignment with legal and constitutional safeguards.

Court Voids CBN Sack of Union Bank Board, Orders Reinstatement