Justice Chukwujekwu Aneke of the Federal High Court, Lagos has ruled that the Central Bank of Nigeria, CBN, exceeded its statutory authority in dissolving the board and management of Union Bank of Nigeria Plc, declaring the January 2024 intervention unlawful.
In his judgement on Wednesday in Suit No: FHC/L/MISC/1377/2025, the court held that the apex bank’s actions were ultra vires and not in compliance with the provisions of the Banks and Other Financial Institutions Act, BOFIA, 2020.
The suit stem from Titan Trust Bank Limited, Luxis International DMCC, and Magna International DMCC, who claimed to be the ultimate beneficial owners of Union Bank.
They challenged the CBN’s decision to dissolve the bank’s board, appoint a new management, and initiate a recapitalisation process that allegedly diluted their shareholding and excluded them from key decisions.
In its judgement, the court nullified the entire regulatory intervention, granting several reliefs in favour of the applicants.
It quashed the CBN’s public announcement dissolving the board and invalidated all actions taken by the regulator-appointed management.
The judge also ordered the immediate reinstatement of the former board and management led by Mr. Farouk Mohammed Gumel.
Additionally, Justice Aneke restrained the CBN and other respondents from exercising any powers over the bank’s governance, including restructuring its share capital or altering its ownership structure.
The court further halted the ongoing recapitalisation process and investor selection programme initiated under the CBN-appointed board.
Beyond the question of statutory authority, the court found that the applicants’ fundamental rights were breached.
It held that they were sanctioned without being given a fair hearing, despite allegations of regulatory infractions arising from a purported special examination of the bank.
The judge noted that the applicants’ shareholding was reduced from 100 per cent to 40 per cent and that they were barred from participating in the recapitalisation without any legal basis, describing the actions as evidence of bad faith.
While the CBN had defended its intervention as part of its prudential oversight, citing severe financial distress at the bank, including a negative capital adequacy ratio, a capital shortfall exceeding N224 billion, and a high non-performing loan ratio, the court held that regulatory powers must be exercised strictly within the law.
On jurisdiction, the court ruled that Section 51 of Banks And Other Financial Institutions Act, BOFIA, does not shield the CBN from judicial review where it acts outside its powers.
It also held that the actions of the CBN-appointed board were subject to review, describing them as agents of the apex bank.
The court dismissed procedural objections raised by the respondents, holding that the relevant rules of court were merely directory and not fatal to the suit.
Justice Aneke further found that the applicants suffered a “continuing injury,” noting that they were excluded from the bank’s management and decision-making processes between January 2024 and December 2025, during which significant corporate actions were taken.
On damages, the court held that while the respondents admitted that the applicants invested $190 million in the bank, additional claims could not be granted in the absence of oral evidence.
