CBN has appealed court ruling nullifying Union Bank Board removal and sought stay of execution.
NewsOnline Nigeria reports that the Central Bank of Nigeria has filed an appeal against a judgment of the Federal High Court in Lagos which nullified its intervention in Union Bank of Nigeria and ordered the reinstatement of the bank’s former board.
The apex bank also applied for a stay of execution of the judgment pending the outcome of the appeal, warning that enforcing the ruling immediately could disrupt the bank’s governance and operational stability.
In a decision delivered on March 25, Justice Chukwujekwu Aneke ruled that the CBN exceeded its regulatory powers when it removed the board and management of Union Bank in January 2024.
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The court subsequently set aside all actions taken by the CBN-appointed board and ordered the immediate reinstatement of the former board led by Farouk Mohammed Gumel, alongside the bank’s management. The court also restrained the CBN and its appointed board from taking further steps toward recapitalisation or related actions.
However, in a notice of appeal filed on March 26, the CBN raised 11 grounds challenging the judgment, arguing that the lower court erred in law and that the decision resulted in a miscarriage of justice.
The apex bank maintained that its intervention was carried out in line with the Central Bank of Nigeria Act and the Banks and Other Financial Institutions Act 2020, which empower it to take decisive regulatory action in distressed financial institutions.
According to the CBN, evidence presented before the court showed that Union Bank was experiencing severe financial distress at the time of the intervention, including a negative capital adequacy ratio, a capital shortfall exceeding ₦224 billion, and a high volume of non-performing loans.
The bank argued that BOFIA authorises it to remove directors and officers of troubled financial institutions and shields such regulatory actions when taken in good faith.
In its motion seeking a stay of execution, the CBN asked the court to restrain the reinstated directors and other respondents from assuming control of Union Bank, interfering with its management, or convening board meetings until the appeal is determined.
The apex bank also urged the court to prevent the respondents from taking steps, including media engagements, that could destabilise the bank, while requesting that all parties maintain the status quo pending the outcome of the appeal.
In a supporting affidavit, the CBN warned that enforcing the judgment immediately could undermine public confidence in Nigeria’s financial system and create broader risks for the banking sector.
The apex bank further noted that its appeal raises significant legal questions regarding the scope of its regulatory authority, adding that without a stay of execution, the appeal could become ineffective.
To prosecute the appeal, the CBN assembled a legal team led by senior advocate Yusuf Ali, alongside other senior lawyers including Kemi Pinheiro, Tunde Fagbohunlu, Uche Val Obi, and Chukwudi Enebeli.
The respondents in the case include Titan Trust Bank Limited, Luxis International DMCC, Magna International DMCC, as well as former Union Bank directors such as Bayo Adeleke and Yetunde Oni.
