Federal High Court for Lagos don deliver one landmark judgment wey don shake Nigeria banking sector. Justice Chukwujekwu Aneke don rule say Central Bank of Nigeria (CBN) no get power to dissolve Union Bank board and management for January 2024. The judge declare say CBN action na ultra vires – meaning dem act outside their legal authority.
For the judgment wey dem deliver on Wednesday, Justice Aneke nullify everything wey CBN do concerning Union Bank governance. The court set aside the public announcement wey dissolve the board and invalidate all actions wey the regulator-appointed management take. The judge order immediate reinstatement of the former board and management wey Farouk Gumel dey lead before.
The case come from Titan Trust Bank Limited, Luxis International DMCC and Magna International DMCC – the ultimate beneficial owners of Union Bank. Dem challenge CBN dissolution of the bank board, appointment of new management, and initiation of recapitalisation process wey dem claim dilute their shareholding and exclude dem from key decisions.
Justice Aneke restrain CBN and other respondents from exercising any powers over the bank governance, including restructuring its share capital or altering its ownership structure. The court also halt the ongoing recapitalisation process and investor selection programme wey CBN-appointed board start.
On the issue of fair hearing, the court hold say applicants fundamental rights don breach. The judge note say dem sanction the shareholders without give dem opportunity to respond to allegations of regulatory infractions wey come from purported special examination of the bank.
The court find say applicants shareholding reduce from 100 percent to 40 percent and say dem exclude dem from participating in recapitalisation exercise without legal justification. Justice Aneke describe the actions as indicative of bad faith.
CBN don defend their intervention as part of prudential oversight. Dem cite severe financial distress for the bank, including negative capital adequacy ratio, capital shortfall wey exceed N224 billion, and high non-performing loan ratio. But the court hold say such regulatory powers must dey exercise strictly within the confines of the law.
On jurisdiction matter, the court rule say Section 51 of Banks and Other Financial Institutions Act 2020 (BOFIA) no shield CBN from judicial review where dem act outside their statutory powers. The court also hold say actions of CBN-appointed board subject to review, describing dem as agents of the apex bank.
The court dismiss procedural objections wey respondents raise, holding say applicable rules of court na merely directory and not sufficient to defeat the suit. Justice Aneke also find say applicants suffer “continuing injury,” noting say dem exclude dem from bank management and decision-making processes between January 2024 and December 2025.
For that period, significant corporate actions undertake. On damages, the court acknowledge say respondents admit applicants invest $190 million for the bank but decline to award additional claims in the absence of oral evidence.
The dispute stem from CBN January 2024 intervention when dem dissolve boards and management of Union Bank, Keystone Bank and Polaris Bank over alleged regulatory breaches and corporate governance failures. At that time, apex bank cite provisions of BOFIA, referencing bank non-compliance with licensing conditions, threats to financial stability, failure to adhere to regulatory directives, and undercapitalisation.
CBN subsequently appoint interim management to take over affected institutions and initiate corrective measures, including recapitalisation and restructuring programmes. The move na part of broader pattern of regulatory interventions by CBN for Nigeria banking sector.
For 2021, regulator remove board of First Bank of Nigeria Holdings Plc over governance concerns. Similar action take against Skye Bank Plc for 2016 due to prudential breaches, with bank licence later revoke and operations transfer to Polaris Bank.
Under BOFIA, CBN get power to intervene for troubled banks, including removing directors where “grave situation” identify. But this latest court ruling don set important precedent about limits of regulatory powers.
The judgment don restore Farouk Gumel as board chairman and the previous management team. CBN-appointed management wey include Yetunde Oni as Managing Director/Chief Executive Officer and Mannir Ubali Ringim as Executive Director now don lose their positions.
Other defendants for the case include CBN Governor, Bayo Adeleke, Oluyinka Abimbola Morgan, Ibrahim Musa Oruma, Chiamaka Ezenwa, Mohammed Balarabe, Eileen Shaiyen, Mojisola Olateru-Olagbegi, Taiwo Shote, Kelechi Nwaoba, and Union Bank of Nigeria.
Market analysts dey watch to see how this ruling go affect investor confidence for Nigeria banking sector. Some experts worry say court decision fit make depositors fear say regulatory oversight weak. Others argue say judgment strengthen rule of law and protect shareholder rights.
The case mark as FHC/L/MISC/1377/2025 for Federal High Court Lagos. Justice Aneke ruling don set aside all decisions wey CBN-appointed board take and bar the apex bank from taking further steps concerning Union Bank governance.
This development come as CBN continue efforts to strengthen Nigeria banking sector through recapitalisation requirements. The court halt of Union Bank recapitalisation process fit have implications for other banks wey dey undergo similar regulatory interventions.
Industry observers dey monitor whether CBN go appeal the judgment. The ruling don create legal precedent wey fit affect how banking regulators exercise powers under BOFIA for future cases.
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