CBN's Board Dissolution of Union Bank Ruled Unlawful

The Federal High Court, presided over by Justice Chukwujekwu Aneke, nullified the Central Bank of Nigeria's (CBN) January 2024 dissolution of Union Bank's board of management, labeling the intervention as ultra vires and inconsistent with the provisions of the Banks and Other Financial Institutions Act (BOFIA) 2020. The court determined that the CBN's actions were not merely procedural but fundamentally challenged the legal basis of its intervention.

The ruling highlighted that the CBN did not produce the necessary examination report to justify such drastic measures, raising significant questions about regulatory enforcement within the banking industry. The court's decision also reflects broader concerns regarding the protection of investor rights and regulatory transparency in Nigeria's financial environment.

This case is particularly relevant as it follows the merger process involving Titan Trust Bank's acquisition of Union Bank, which had sought regulatory approval for its holdco structure. The court's findings suggest a troubling contradiction in the CBN's regulatory approach, potentially impacting investor confidence in Nigeria's banking sector.