Home / Business and Economy / Court Overturns CBN: Union Bank Leadership Restored
Court Overturns CBN: Union Bank Leadership Restored
30 Mar
Summary
- Federal court orders Union Bank's former board reinstated.
- CBN's dissolution of the board in January 2024 deemed beyond powers.
- Ruling nullifies actions taken by interim leadership for two years.
A federal high court in Lagos has issued a ruling that casts doubt on the governance and decision-making authority within Union Bank. The court ordered the immediate reinstatement of the former board, chaired by Farouk Mohammed Gumel, and the previous management team. The judge declared that the Central Bank of Nigeria acted beyond its powers in January 2024 when it dissolved the bank's board and management.
This judgment nullifies all actions undertaken by the interim leadership installed by the regulator over the preceding two years. The ruling specifically invalidates approvals, directives, and transactions related to recapitalization efforts initiated under the interim leadership. It also restrains the regulator and its appointed representatives from exercising the powers of the legitimate board.
The financial sector has expressed concerns about the validity of decisions made by the current board, especially during ongoing recapitalization processes. Legal observers noted that actions taken contrary to the court order may have implications for their validity. Despite the legal uncertainties, both the regulator and the bank have assured customers of operational continuity and the security of deposits.
