Justice Chukwujekwu Aneke of the Federal High Court, Lagos has scolded the Central Bank of Nigeria, CBN for sacking the Board of Union Bank, one of Nigeria’s first generation commercial banks.
The judge also quashed the CBN take over of the bank , after ordering the apex bank to restore its board.
Justice Aneke, while delivering the judgment on Wednesday, ruled that the CBN went beyond its statutory powers as a regulator to take such actions against the commercial bank, saying CBN’s action contravened the provisions of the Banks and Other Financial Institutions Act, BOFIA 2020.
“The actions of the respondent are ultra vires and not in compliance with the provisions of BOFIA 2020,” Justice Aneke ruled.
The court also said, “The respondents are hereby restrained from further interfering in the governance of the bank, including restructuring its share capital or altering its ownership structure.”
The judge added, ““They were sanctioned without being afforded an opportunity to be heard. This constitutes clear evidence of bad faith.”
The case against CBN was filed by Titan Trust Bank Limited, Luxis International DMCC, and Magna International DMCC, who claimed to be the ultimate beneficial owners of Union Bank.
Meanwhile, the CBN has reacted to the ruling saying there’s no immediate change to the status of the bank. The position, the magazine learnt has put the customers and investors of the bank in more confusion, as to what to do next.
In a statement released after the judgment by CBN spokesperson Sidi Ali, the apex said nothing has changed.
The statement read partly, “The CBN assures the public that UBN’s status is unchanged and that it remains fully capable of meeting its obligations to customers, depositors, and all stakeholders.
“The CBN will continue to provide the necessary regulatory oversight to ensure Union Bank operates in a safe, sound, and stable manner, while maintaining public confidence in the financial system.”
“Honestly, some of us don’t know what to do now because of the position of the CBN. May be they are trying to challenge the ruling in the appellate court we don’t know yet. We are just confused,” a customer said on Thursday.
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