Union Bank: Fresh Hurdles As Shareholder Drags CBN, Titan Trust To Court

Dr Charles Mekwunye, an aggrieved shareholder of one of Nigeria’s oldest commercial banks Union Bank has dragged the Central Bank of Nigeria, CBN to court over its approval of the sale of the bank to Titan Trust Bank.

In the suit number FHC/L/CS/674/2022, the plaintiff is asking for the nullification of the deal, as well as a stay of execution until the court makes final judgment on the matter.

The CBN, the magazine learnt is a co-defendant in the case, and has already been served of the court process.

Union bank was in June this year fully acquired and taken over by the barely two-year old Titan after approval by the Godwin Emefiele-led CBN.

The deal which entails the acquisition of majority shares of Union Bank, which at the time was worth over N3 trillion in asset, according to its 2021 audited Financial Statement has not stopped amazing key stakeholders in the sector, who are still wondering how a relatively unknown entity like Titan, with just two branches, could effectively take over the behemoth Union Bank.

But in spite of the questions raised by key stakeholders, the Regulator had gone ahead to ratified the deal.

Meanwhile, feelers are now emerging that the suit filed by the plaintiff could open up some critical issues in the deal which many Nigerians believe must have been hastily consummated under very shadowy circumstances.

According to the court papers filed by Dr Mekwunye through his team of lawyers led by A.M Makinde, a Senior Advocate of Nigeria, SAN at the Federal High Court in Lagos, the plaintiff is seeking an order to nullify the CBN approval of the sale of Union Bank to Titan Trust Bank.

This is the second time the plaintiff had challenged the deal having first dragged Union Global Partners Ltd and Atlas Mara Limited to court over the sale of their majority shares in Union Bank.

The two firms are now being joined in the present case with the CBN. The British Virgin Islands-based Atlas Mara and Union Global Partners Limited owned a combined 93.4 per cent of Union Bank shares that were acquired by Titan Trust Bank.

In the fresh suit against the CBN, Dr. Mekwunye, contends that the deal did not follow due process, and also violates Nigeria’s extant laws guiding such transactions.

The plaintiff also insists that Titan did not have enough financial capacity to acquire Union Bank, considering that it has just been licensed barely three years ago without any record of strong financial surplus to be able for such humongous deal.

Among other things, Dr. Mekwunye, claimed that the sales of the combined shares of Union Global Partners and Atlas Mara Ltd, in Union Bank was done by private treaty instead of being traded on the floor of the Nigerian Stock Exchange as required by law thereby making the transaction invalid and unlawful.

Recall that Titan Trust Bank had after taking over Union Bank, dissolved its board and appointed Mudassir Amray as its new managing director and chief executive officer.

The bank also appointed a new chairman and three directors; Farouk Gumel, chairman, and Andrew Ojel, Abubakar Mohammed and Lawrence Mackombo, directors.