By By Elizabeth Ugbo
A Federal High Court in Lagos, presided over by Justice Chukwujekwu Aneke, has reinstated the board of Union Bank of Nigeria after ruling that the Central Bank of Nigeria acted unlawfully. The judgment, delivered on Wednesday, nullified the January 2024 intervention and restored the bank’s previous management. The court also halted the recapitalisation process and restrained further regulatory interference.
Court Declares CBN Action Unlawful
Justice Aneke held that the CBN exceeded its statutory powers under BOFIA 2020. He ruled that the dissolution of the bank’s board lacked legal backing.
“The actions of the respondent are ultra vires,” the judge stated.
He stressed that regulatory authority must remain within legal limits. According to him, no agency can act beyond the law, regardless of its powers.
Board and Management Reinstated
The court ordered the immediate return of the former board led by Farouk Mohammed Gumel. It also nullified all decisions taken by the CBN-appointed management.
Additionally, the judge restrained the CBN from interfering in the bank’s governance. This includes any attempt to alter ownership or restructure share capital.
Recapitalisation Process Halted
The court stopped the ongoing recapitalisation and investor selection programme. It ruled that the process excluded the original shareholders without legal justification.
The applicants argued that their stake dropped from 100 percent to 40 percent. The court agreed that such dilution lacked due process.
Fair Hearing Violated
Justice Aneke found that the applicants’ rights were breached. He ruled that they were sanctioned without being heard.
“They were excluded from management decisions,” the judge noted.
He added that the exclusion lasted from January 2024 to December 2025. Therefore, the court described the situation as a continuing injury.
Jurisdiction and Oversight Clarified
The court clarified that Section 51 of BOFIA does not shield the CBN from judicial review. It stated that courts can examine actions taken beyond legal authority.
Furthermore, the judge dismissed procedural objections raised by the respondents. He ruled that such objections could not defeat the case.
Damages Limited Over Lack of Evidence
Although the court acknowledged a $190 million investment, it declined further damages. The judge cited the absence of oral evidence to support additional claims.
Background to the Suit
The case was filed by Titan Trust Bank Limited, Luxis International DMCC, and Magna International DMCC. They claimed ownership of the bank and challenged the CBN’s intervention.
The CBN had defended its action, citing financial distress. It pointed to capital shortfalls, poor loan performance, and a negative capital adequacy ratio.
However, the court ruled that such concerns must be addressed within the law.
