Court docket restores Union Financial institution board, overturns CBN determination

Justice Chukwujekwu Aneke of the Federal Excessive Court docket in Lagos has reinstated the Union Financial institution Board and dominated that the Central Bank of Nigeria acted exterior its statutory powers in dissolving the board and administration of the financial institution, declaring the January 2024 intervention illegal.

Delivering judgment on Wednesday in Go well with No. FHC/L/MISC/1377/2025, the court docket held that the apex financial institution’s actions have been extremely vires and inconsistent with the provisions of the Banks and Different Monetary Establishments Act 2020.

“The actions of the respondent are extremely vires and never in compliance with the provisions of BOFIA 2020,” Justice Aneke held.

The go well with was instituted by Titan Trust Bank Restricted, Luxis Worldwide DMCC, and Magna Worldwide DMCC, who claimed to be the last word helpful house owners of the financial institution.

They challenged the CBN’s determination to dissolve Union Financial institution’s board, appoint new administration, and start a recapitalisation course of, which they argued diluted their shareholding and excluded them from key company selections.

In its judgment, the court docket nullified the whole intervention and granted a number of reliefs in favour of the candidates.

It quashed the CBN’s public announcement dissolving the board and invalidated all actions taken by the regulator-appointed administration.

The court docket additionally ordered the speedy reinstatement of the previous board and administration led by Mr Farouk Mohammed Gumel.

Justice Aneke additional restrained the CBN and different respondents from exercising any governance powers over the financial institution.

“The respondents are hereby restrained from additional interfering within the governance of the financial institution, together with restructuring its share capital or altering its possession construction,” the court docket dominated.

The court docket additionally halted the recapitalisation course of and investor choice programme initiated beneath the CBN-appointed board.

On the difficulty of truthful listening to, the court docket discovered that the candidates’ elementary rights have been breached.

“They have been sanctioned with out being afforded a chance to be heard,” the decide mentioned, including that such actions couldn’t stand in legislation.

The court docket famous that the candidates’ shareholding had been diminished from 100 per cent to 40 per cent and that they have been excluded from the recapitalisation course of with out authorized justification.

“This constitutes clear proof of dangerous religion,” Justice Aneke held.

Whereas the CBN had defended its intervention as a part of its regulatory oversight, citing monetary misery, together with a destructive capital adequacy ratio, a capital shortfall exceeding N224bn, and excessive non-performing loans, the court docket maintained that regulatory powers have to be exercised throughout the bounds of the legislation.

“Statutory powers, regardless of how vast, have to be exercised strictly throughout the confines of the legislation,” the court docket acknowledged.

On jurisdiction, the court docket clarified that Part 51 of BOFIA doesn’t protect the CBN from judicial scrutiny the place it acts exterior its authorized authority.

“The court docket retains the facility to evaluate actions taken in extra of statutory powers,” Justice Aneke dominated, including that the CBN-appointed board acted as brokers of the apex financial institution and have been subsequently topic to judicial evaluate.

The court docket additionally dismissed procedural objections raised by the respondents, holding that the relevant guidelines of court docket have been merely listing and never ample to defeat the go well with.

Justice Aneke additional held that the candidates suffered a “persevering with damage”, noting that they have been excluded from the financial institution’s administration and decision-making processes between January 2024 and December 2025.

On damages, the court docket acknowledged that the candidates invested $190m within the financial institution however declined to grant further claims as a result of lack of oral proof.

“Further reliefs sought can’t be granted within the absence of oral proof,” the decide held.