Court Nullifies CBN Takeover of Union Bank

LAGOS, Nigeria — A Federal High Court in Lagos has nullified the Central Bank of Nigeria’s dissolution of Union Bank of Nigeria’s board and management, ruling that the apex bank acted beyond its powers and in bad faith.

Justice Chukwujekwu Aneke delivered the judgment on March 25, 2026, in a suit filed by core shareholders of the bank, including Titan Trust Bank, Luxis International, and Magna International. The court ordered the immediate reinstatement of the former board and management.

The shareholders had challenged the CBN’s January 2024 intervention, which cited regulatory non-compliance, corporate governance failures, and threats to financial stability under the Banks and Other Financial Institutions Act (BOFIA).

According to court records reviewed in the proceedings, Titan Trust Bank acquired Union Bank in 2022 from previous owners, Atlas Mara and Union Global Partners Ltd. The acquisition was funded through equity from the TGI Group and a facility from Afreximbank.

The former board sought CBN approval for a merger between Titan Trust Bank and Union Bank, as well as the creation of a holding company to manage the combined entity and handle the Afreximbank loan. CBN approved the merger but declined the holding company structure.

In its ruling, the court held that the CBN failed to afford the directors a fair hearing before dissolving the board. The judge noted that no special examination report was presented in evidence to justify the drastic regulatory action.

The court also found that the shareholders’ stake was allegedly diluted from 100 per cent to 40 per cent during the recapitalisation process without proper legal basis, describing the move as indicative of bad faith. It further ruled that the CBN’s actions caused continuing injury to the applicants by excluding them from management decisions.

CBN had defended its intervention, pointing to issues including negative capital adequacy ratio and a capital shortfall exceeding N224 billion. However, the court insisted that regulatory powers must be exercised strictly within the law and subject to judicial review where exceeded.

The judgment explicitly stated that bad faith is inferred from the facts and circumstances of the case rather than direct observation. It set aside all decisions taken by the CBN-appointed interim board.

NaijaChoice News understands that the CBN has since filed an appeal against the judgment and applied for a stay of execution, while also replacing some of its legal team with over 15 Senior Advocates of Nigeria.

The development comes amid ongoing efforts to strengthen corporate governance and stability in Nigeria’s banking sector, a critical pillar of the nation’s economy.

This landmark ruling underscores the judiciary’s role in checking regulatory overreach while raising fresh questions about the delicate balance between prudential oversight and shareholders’ rights in the Nigerian financial system.