Court Voids CBN Takeover of Union Bank, Orders Board Reinstatement

By: Joyce Idanmuze

A Nigerian court has set aside the intervention of the Central Bank of Nigeria (CBN) in Union Bank, declaring the regulatory action invalid and directing the reinstatement of the bank’s previous board of directors.

In its ruling, the court held that the apex bank’s takeover did not comply with due process and therefore lacked legal standing. The judgement effectively reverses the regulatory action, restoring the governance structure that existed prior to the intervention.

The case arose from disputes surrounding the circumstances under which the CBN assumed control of Union Bank, including concerns over the legality of the process and adherence to statutory provisions guiding such actions.

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Delivering its decision, the court emphasized the supremacy of the rule of law in financial sector regulation, noting that even regulatory authorities must operate strictly within the confines of enabling laws. It concluded that any action taken outside those boundaries cannot be sustained.

Consequently, the court ordered the immediate reinstatement of the affected board members, effectively returning control of the bank to its former leadership.

The ruling is expected to have broader implications for regulatory oversight in Nigeria’s banking sector, particularly in relation to the limits of intervention powers exercised by the CBN.

Market observers note that the decision could trigger further legal and institutional reviews, especially in cases where regulatory actions are perceived to conflict with corporate governance principles or shareholder rights.

As of the time of filing this report, there has been no official response from the Central Bank of Nigeria regarding the judgement or whether it intends to challenge the decision on appeal.

Contact: report@probitasreport.com 

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