Who is involved
In a significant turn of events, the Federal High Court in Lagos ruled on March 26, 2026, that the Central Bank of Nigeria (CBN) acted beyond its powers when it dissolved the board and management of Union Bank in January 2024. The court’s decision ordered the immediate reinstatement of the former board led by Farouk Mohammed Gumel, quashing all decisions made by the CBN-appointed management.
Prior to this ruling, expectations were set around the CBN’s authority to manage and oversee the banking sector, particularly in light of the challenges faced by Union Bank, which included a staggering capital shortfall of 224 billion Naira. The CBN had appointed Yetunde Oni as managing director and Mannir Ubali Ringim as executive director, believing that new leadership was essential for the bank’s stability and recapitalization.
The decisive moment came when core shareholders, including Titan Trust Bank, Luxis International, and Magna International, challenged the CBN’s actions in court. They argued that their fundamental rights were breached when the CBN reduced their shareholding from 100% to 40% without legal justification. The court agreed, stating that the CBN’s actions were ultra vires and not compliant with the Banks and Other Financial Institutions Act (BOFIA) 2020.
As a direct effect of the court’s ruling, the ongoing recapitalization process initiated under the CBN-appointed board was halted. The court also restrained the CBN and its appointed board from taking any further actions related to the bank’s recapitalization. This ruling not only reinstated the former board but also emphasized the need for regulatory bodies to operate within their legal frameworks.
Justice Chukwujekwu Aneke, who presided over the case, highlighted that the CBN acted beyond its powers in removing the board and management of Union Bank. He noted, “The judgment nullified the administrative actions of the CBN-appointed board and management of Union Bank,” underscoring the importance of adhering to established legal processes in corporate governance.
The CBN has acknowledged the court’s judgment and is currently reviewing it while reaffirming its commitment to the rule of law. Hakama Sidi Ali, a representative of the CBN, stated, “The CBN will continue to provide the necessary regulatory oversight to ensure Union Bank operates in a safe, sound, and stable manner.” This response indicates a willingness to comply with the court’s ruling while maintaining its regulatory responsibilities.
Details remain unconfirmed regarding whether the current board can continue to carry out administrative actions after the court ruling. The implications of this ruling extend beyond Union Bank, as it raises questions about the balance of power between regulatory authorities and corporate governance in Nigeria’s banking sector. Stakeholders will be closely monitoring how this situation unfolds in the coming weeks and months.