The Federal High Court in Lagos has ordered the reinstatement of the board and management of Union Bank of Nigeria, overturning the decision of the Central Bank of Nigeria to dissolve the bank’s leadership in 2024.
The court also halted the recapitalisation process and barred the apex bank from further involvement in the bank’s governance, marking a major setback for the regulator’s intervention.
Delivering judgment in Suit No. FHC/L/MISC/1377/2025, Justice Chukwujekwu Aneke ruled that the actions taken by the Central Bank fell outside its legal powers under the Banks and Other Financial Institutions Act (BOFIA) 2020.
“The actions of the respondent are ultra vires and not in compliance with the provisions of BOFIA 2020,” the judge held.
The ruling followed a suit filed by Titan Trust Bank Limited and two other entities, which claimed ownership of the bank and challenged the dissolution of its board and appointment of new management.
According to the applicants, the intervention led to a significant reduction in their shareholding and excluded them from major corporate decisions, including the ongoing recapitalisation programme.
In its decision, the court nullified all steps taken under the CBN-appointed management and restored the previous leadership led by Farouk Mohammed Gumel. It further restrained the regulator from restructuring the bank’s ownership or share capital.
“The respondents are hereby restrained from further interfering in the governance of the bank, including restructuring its share capital or altering its ownership structure,” the court ruled.
On the issue of fair hearing, the court held that the applicants were denied the opportunity to defend themselves before sanctions were imposed.
“They were sanctioned without being afforded an opportunity to be heard,” the judge said.
The dispute stems from the CBN’s January 2024 intervention, when it dissolved the boards and management of Union Bank, Keystone Bank and Polaris Bank over alleged regulatory and corporate governance concerns. The apex bank had cited non-compliance with licensing conditions, financial instability risks and undercapitalisation as justification for the move, before appointing interim management and launching restructuring and recapitalisation measures.
Such actions form part of a broader pattern of regulatory interventions in Nigeria’s banking sector. In previous cases, the regulator removed the board of First Bank of Nigeria Holdings Plc in 2021 over governance issues, while Skye Bank Plc was taken over in 2016 following prudential breaches, with its operations later transferred to Polaris Bank.
While the Central Bank argued that its intervention in Union Bank was necessary to address financial concerns, the court maintained that regulatory authority must still be exercised within the law.
“Statutory powers, no matter how wide, must be exercised strictly within the confines of the law,” the court stated.
The judge also affirmed that the court has jurisdiction to review actions taken beyond statutory limits, dismissing arguments that the regulator’s powers were beyond scrutiny.
While acknowledging that the applicants invested $190 million in the bank, the court declined to award additional damages due to lack of supporting oral evidence.
“Additional reliefs sought cannot be granted in the absence of oral evidence,” the judge held.
