Union Bank board reinstatement ordered as court rules CBN acted unlawfully, nullifying intervention and restoring former management

Justice Chukwujekwu Aneke of the Federal High Court in Lagos has ordered the reinstatement of the board of Union Bank of Nigeria, ruling that the Central Bank of Nigeria acted outside its statutory powers in dissolving the bank’s leadership in January 2024.

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The Union Bank board reinstatement followed a judgment delivered on Wednesday in Suit No. FHC/L/MISC/1377/2025, in which the court declared the apex bank’s intervention unlawful and inconsistent with the provisions of the Banks and Other Financial Institutions Act 2020.

Justice Aneke held that the actions of the regulator were ultra vires, stressing that statutory authority must be exercised strictly within legal limits.

The court consequently nullified the dissolution of the bank’s board and management, as well as all subsequent decisions taken under the CBN-appointed leadership.

The suit was filed by Titan Trust Bank Limited, alongside Luxis International DMCC and Magna International DMCC, who claimed beneficial ownership of the bank.

The applicants argued that the intervention diluted their shareholding and excluded them from critical corporate decisions, including a recapitalisation process initiated by the regulator.

In a decisive ruling, the court quashed the CBN’s public announcement dissolving the board and ordered the immediate restoration of the former leadership under Farouk Mohammed Gumel.

It also restrained the apex bank and its agents from further interference in the governance or ownership structure of the bank.

“The respondents are hereby restrained from further interfering in the governance of the bank,” the court ruled, halting ongoing restructuring and investor selection processes initiated under the intervention.

On the issue of fair hearing, the court found that the applicants’ fundamental rights were breached, noting that they were sanctioned without being given an opportunity to respond.

Justice Aneke described the reduction of their shareholding from full ownership to 40 per cent, without due process, as evidence of bad faith.

While the Central Bank of Nigeria had defended its actions on grounds of financial instability within the bank, including capital shortfalls and non-performing loans, the court maintained that regulatory concerns do not justify actions taken outside the law.

The judgment further clarified that statutory protections do not shield regulatory authorities from judicial scrutiny where powers are exceeded.

The court affirmed its jurisdiction to review such actions, reinforcing the principle that no institution operates above the law.

Although the court acknowledged that the applicants had invested substantial funds in the bank, it declined to award additional damages due to the absence of oral evidence.

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The ruling is widely regarded as a significant legal development for Nigeria’s banking sector, underscoring judicial oversight over regulatory actions and setting a powerful precedent for corporate governance and financial regulation.