Central Bank Of Nigeria Mobilises Senior Advocates To Challenge Court Verdict Nullifying Union Bank Takeover
Central Bank Of Nigeria Mobilises Senior Advocates To Challenge Court Verdict Nullifying Union Bank Takeover
The court ordered the immediate restoration of the bank’s former board and management, effectively handing control back to the core shareholders.
The Central Bank of Nigeria (CBN) has assembled a team of Senior Advocates of Nigeria (SANs) to challenge a Federal High Court judgment that voided its intervention in Union Bank of Nigeria Plc and ordered the reinstatement of the bank’s former board.
The legal battle follows a ruling delivered on March 25, 2026, by Justice Chukwujekwu Aneke of the Federal High Court, Lagos Division, which held that the apex bank exceeded its statutory powers by dissolving the bank’s board and management.
SaharaReporters on Wednesday reported that the Federal High Court sitting in Lagos State nullified the controversial dissolution of the board and management of Union Bank of Nigeria by the CBN, ruling that the apex bank acted outside its statutory powers
Delivering judgment on Wednesday, Justice Chukwujekwu Aneke set aside all actions taken by the CBN following its January 2024 intervention in the bank, including decisions made by the regulator-appointed board.
The court ordered the immediate restoration of the bank’s former board and management, effectively handing control back to the core shareholders.
In a sweeping ruling, the court also restrained the CBN, its appointed board, and agents from taking any further steps relating to the bank’s operations, including plans to recapitalise the institution.
In a swift response, the CBN filed a notice of appeal on March 26, 2026, faulting the judgment and seeking its reversal in its entirety.
The appeal is being spearheaded by a team of prominent SANs led by Yusuf Ali, alongside Kemi Pinheiro, Tunde Fagbohunlu, Uche Val Obi, and Chukwudi Enebeli.
The apex bank raised 11 grounds of appeal, arguing that the trial court erred in law and occasioned a miscarriage of justice by declaring its regulatory intervention unlawful.
According to the CBN, its decision to take over Union Bank was backed by provisions of the Central Bank of Nigeria Act and the Banks and Other Financial Institutions Act (BOFIA) 2020, citing what it described as the bank’s “grave financial condition” at the time.
The bank told the appellate court that evidence before the lower court showed Union Bank had a negative capital adequacy ratio, a capital shortfall exceeding N224 billion, and a troubling volume of non-performing loans.
It argued that these indicators justified urgent regulatory action to prevent systemic instability in Nigeria’s banking sector.
The CBN further relied on Section 34 of BOFIA, which empowers the apex bank’s governor to remove directors and officers of financially distressed banks, and Section 51, which protects regulatory actions taken in good faith.
It accused the trial court of misinterpreting these provisions, leading to what it described as an erroneous conclusion that its actions were ultra vires and unconstitutional.
“The lower court wrongly nullified the decisions and administrative actions of the management appointed by the CBN without establishing any legal basis for reinstating the former board,” the apex bank argued in its filings.
Alongside the appeal, the CBN filed a motion on notice seeking a stay of execution of the judgment pending the determination of the appeal.
In the application, the apex bank asked the court to restrain the reinstated directors and other respondents from taking control of Union Bank or interfering with its management and operations.
It also sought orders preventing them from convening board meetings, altering governance structures, or engaging in public statements capable of destabilising the bank.
The CBN further urged the court to direct all parties to maintain the status quo until the appellate court delivers its decision.
The respondents in the suit include Titan Trust Bank Limited, Luxis International DMCC, Magna International DMCC, as well as former Union Bank directors such as Bayo Adeleke and Yetunde Oni.
They had approached the Federal High Court as beneficiaries of Union Bank shares, challenging the legality of the CBN’s intervention in the bank’s affairs.
In an affidavit supporting its motion for stay, the apex bank warned that enforcing the lower court’s judgment could trigger instability within Union Bank and erode public confidence in Nigeria’s financial system.
It stressed that the appeal raises critical legal questions about the scope of its regulatory authority and the interpretation of banking laws.
The CBN added that failure to grant a stay could render the appeal nugatory, insisting that preserving the current management structure is necessary to safeguard financial stability while the appellate court considers the case.
The outcome of the appeal is expected to have far-reaching implications for regulatory oversight and the extent of the CBN’s powers in managing distressed financial institutions in Nigeria.
