Landmark Court Ruling: CBN’s Intervention in Union Bank Declared Bad Faith
Two recent articles claimed Union Bank’s board was sacked over loan irregularities. A Federal High Court has now set aside the CBN’s action, ruling it was taken in bad faith and breached fair-hearing rights. The judgment orders the immediate reinstatement of the former board and management and awards $190 million to shareholders. It highlights that the CBN filed no formal examination report and questions the mixing of a merger approval and abrupt board dissolution. Key issues include the stalled holding-company structure after Titan Trust Bank’s acquisition, a loan from Afrexim Bank remaining on the books, and a confidential forensic report surfacing in the press. Observers are asking why the apex bank delayed mandatory examinations before its regulatory intervention. Subject to appeal, this decision challenges the limits of the CBN’s powers under BOFIA and underscores the need for due process in financial regulation.
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