In a landmark ruling that sends ripples through Nigeria's financial sector, a Federal High Court in Lagos has decisively overturned the Central Bank of Nigeria's (CBN) January 2024 dissolution of the board and management of Union Bank of Nigeria. The court declared the apex bank's action "ultra vires," ordering the immediate reinstatement of the bank's former leadership.
Court Quashes CBN's Intervention
Justice Chukwujekwu Aneke presided over the case, delivering a judgment on Wednesday that invalidated all decisions made by the CBN-appointed interim board. The pronouncement effectively rewinds the clock, restoring the previous board and management to their positions at one of Nigeria's oldest financial institutions.
Beyond reinstating the former board, the court issued a stern injunction, restraining the CBN, its appointees, and agents from undertaking any further steps concerning Union Bank. This includes crucial actions related to the bank's proposed recapitalisation and any other related measures that might impact its governance or structure.
Background to the Legal Battle
The saga began in January 2024 when the Central Bank of Nigeria announced the dissolution of the boards of several banks, including Union Bank, citing alleged corporate governance infractions and non-compliance with regulatory directives. Following this, the CBN appointed Yetunde Oni as Managing Director/Chief Executive Officer and Mannir Ubali Ringim as Executive Director for Union Bank.
However, core shareholders of Union Bank — namely Titan Trust Bank, Luxis International, and Magna International — swiftly challenged the legality of the CBN’s intervention. They approached the court, arguing that the removal of the bank's directors and the subsequent proposed recapitalisation by the interim board were conducted without due process, rendering them unlawful.
The shareholders had previously secured interim reliefs from the court on December 5, 2023, paving the way for the substantive matter to be heard and ultimately decided in their favour.
Key Implications of the Ruling
Wednesday's ruling carries significant weight and sets several precedents:
- Reinstatement of Former Leadership: The pre-January 2024 board and management of Union Bank are to be immediately restored.
- Invalidation of Decisions: All actions, policies, and appointments made by the CBN-appointed board since January 2024 are now null and void.
- Curb on Regulatory Overreach: The judgment underscores the importance of due process and statutory limits on regulatory powers, even for a powerful entity like the CBN.
- Impact on Recapitalisation: Any proposed recapitalisation efforts or related strategic initiatives by the interim board are now halted, subject to the reinstated board's decisions.
Parties Involved
The list of defendants in the suit highlighted the broad scope of the legal challenge, encompassing both the regulatory body and its appointees:
- The CBN Governor
- The Central Bank of Nigeria (CBN)
- Bayo Adeleke
- Yetunde B. Oni (appointed MD/CEO)
- Oluyinka Abimbola Morgan
- Ibrahim Musa Oruma
- Chiamaka Ezenwa
- Mohammed Balarabe
- Eileen Shaiyen
- Mojisola Olateru-Olagbegi
- Mannir Ringim (appointed Executive Director)
- Taiwo Shote
- Kelechi Nwaoba
- Union Bank of Nigeria Plc
This judicial pronouncement promises a significant shake-up in Union Bank's governance structure and is likely to be closely watched by stakeholders across Nigeria's banking landscape.