A Lagos federal high court has ordered the restoration of the former board of Union Bank, led by Farouk Mohammed Gumel, overturning the Central Bank of Nigeria’s (CBN) controversial decision made in January 2024 to dissolve the board and management. The court’s ruling, delivered on March 25, 2026, has significant implications for the bank and its stakeholders, as it quashed all decisions taken by the CBN-appointed board.

The court ruled that the CBN acted beyond its powers in removing the board, a decision that has now been nullified. This ruling not only reinstates the former management but also restrains the CBN and its appointed board from pursuing any actions related to recapitalization or investor selection processes. The judgment is seen as a critical check on the CBN’s authority, raising questions about the regulatory body’s future actions.

The CBN had previously announced the dissolution of Union Bank’s board in January 2024, citing concerns over governance and financial stability. However, core shareholders swiftly filed a motion seeking a judicial review of the CBN’s actions, leading to this landmark ruling. The court’s decision underscores the ongoing tensions between regulatory oversight and corporate governance in Nigeria’s banking sector.

Chika Mbonu, a financial analyst, commented on the potential fallout from the ruling, stating, “Banking is almost essentially a confidence game… the depositors want to make sure their money is safe.” This sentiment reflects the broader concerns within the banking community regarding depositor confidence and the operational stability of Union Bank following the court’s decision.

While the CBN has acknowledged the judgment and is currently reviewing it, they assured the public that Union Bank’s status remains unchanged and that the bank is capable of meeting its obligations to customers. However, the uncertainty surrounding the governance of Union Bank poses a significant risk to its operations. Mbonu warned, “If things are not resolved quickly… it can become a war of attrition.”

Observers are now left to ponder the implications of this ruling on the banking sector as a whole. The court’s decision could set a precedent for how regulatory bodies interact with financial institutions, particularly in terms of governance and management changes. The CBN must now navigate this setback carefully, ensuring that they comply with the court’s orders while maintaining the stability of the banking system.

Details remain unconfirmed regarding whether the current board can continue to carry out administrative actions following the ruling. The potential impact of the ruling on depositor confidence and banking operations remains unclear, leaving stakeholders anxious about the future of Union Bank.

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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.

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Before the recent court ruling, the Central Bank of Nigeria (CBN) had dissolved the board and management of Union Bank in January 2024, a move that was met with significant backlash from the bank’s core shareholders. The expectation was that this dissolution would lead to a new leadership structure under the CBN’s appointed executives, Yetunde Oni as Managing Director/CEO and Mannir Ubali Ringim as Executive Director.

However, on March 25, 2026, a decisive moment occurred when the Federal High Court in Lagos nullified the CBN’s actions, reinstating the former board and management of Union Bank. Justice Chukwujekwu Aneke stated, “The court has effectively invalidated all actions taken by the apex bank in respect of the bank’s leadership change.” This ruling marked a significant shift in the governance of Union Bank, reversing the CBN’s authority over the institution.

The immediate effects of this ruling are profound. The court has restrained the CBN from taking any further steps regarding Union Bank, including actions related to its recapitalization. This means that the bank’s previous leadership will resume their roles, which could stabilize the bank’s operations and restore confidence among its stakeholders.

In the wake of the ruling, the CBN is now in the process of obtaining a Certified True Copy of the court’s decision. The central bank has expressed its commitment to operate within established legal processes, assuring the public that the status of Union Bank remains unchanged and that it can meet its obligations to customers, depositors, and stakeholders.

Experts suggest that this ruling could have broader implications for regulatory practices in Nigeria’s banking sector. The legal challenge brought forth by Union Bank’s shareholders highlights the tension between regulatory authorities and financial institutions, raising questions about the extent of the CBN’s powers.

As the situation unfolds, it remains to be seen how Union Bank will navigate this reinstatement and whether the CBN will adjust its approach to oversight in light of the court’s decision. The ruling has undoubtedly shifted the landscape for Union Bank, but the long-term effects on its operations and governance will require careful observation.

Details remain unconfirmed regarding the next steps for both Union Bank and the CBN as they respond to this significant legal development.

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