Stewardship, Not Seizure: What the Union Bank Case Is Really About
There is a particular genre of financial commentary that mistakes legal process for factual verdict. A court delivers a first-instance ruling, procedural questions are raised, and before the ink is dry on the appeal filing, the narrative hardens: the regulator overreached, investor confidence has collapsed, and Nigeria’s financial governance stands accused before the world. Much of the commentary currently circulating about Union Bank of Nigeria belongs to that genre.
Some of those commentaries raise legitimate procedural concerns. But they are also incomplete and incompleteness in financial journalism can distort public understanding of systemic risk, regulatory responsibility, and institutional governance.
The Acquisition That Started Everything
In 2022, Titan Trust Bank, then chaired by Tunde Lemo, acquired approximately 94 per cent of Union Bank of Nigeria through two Dubai-registered entities: Luxis International DMCC, promoted by Rahul Savara, and Magna International DMCC linked to Cornelius Vink and the Tropical General Investments Group.
The approximately US$300 million acquisition was reportedly financed predominantly through an African Export-Import Bank facility. Yet the regulatory principle at issue is neither obscure nor optional: borrowed funds are not meant to be used to acquire shares in a licensed financial institution. That prohibition exists because debt-funded acquisitions can undermine the very capital structure regulators are mandated to protect.
According to findings referenced in the dispute, the acquisition financing was subsequently reflected in the acquired bank’s own books without adequate hedging against exchange-rate exposure. As the naira depreciated, revaluation losses reportedly intensified, capital adequacy weakened significantly, non-performing loan exposure increased, and a substantial capital deficit emerged.
Importantly, as acknowledged in the bank’s own Notice of Appeal, a special examination was conducted and its findings were presented to former Managing Director Mudassir Amray and the board chaired by Farouk Gumel. Those findings reportedly detailed serious financial deterioration and continuing regulatory infractions.
That record complicates the argument that the Central Bank of Nigeria acted arbitrarily or without evidentiary basis.
The Legal Questions Before the Courts
The CBN relied on Section 34 of BOFIA 2020 and Section 52 of the CBN Act 2007 — provisions that grant broad discretionary intervention powers in circumstances involving financial instability or regulatory breaches.
The Federal High Court’s interpretation of those powers as quasi-judicial, and therefore subject to additional procedural requirements, now forms a central issue on appeal.
Both the CBN and Union Bank of Nigeria have filed appeals. The bank’s Notice of Appeal reportedly advances several substantive legal arguments, including:
whether the original applicants possessed the requisite locus standi under the rule in Foss v. Harbottle;
whether the suit was statute-barred, having been initiated nearly two years after the January 2024 regulatory action; and
whether participation in a CBN-supervised recapitalisation process mandated under Section 9 of BOFIA can reasonably be construed as evidence of bad faith.
These are not peripheral procedural objections. They are central legal questions that the appellate courts must now determine.
The Human Stakes Behind the Litigation
Behind the litigation sits a systemically important financial institution with approximately 7.8 million depositors, about 6,450 employees, and operations spanning 281 branches nationwide.
Notably, the bank’s own affidavit reportedly acknowledges continuing reliance on CBN regulatory forbearance to sustain operations. Far from weakening the case for intervention, that admission arguably strengthens the rationale for regulatory action under prudential supervision principles.
Critics maintain that the dispute damages investor confidence in Nigeria’s banking system. Yet broader market indicators present a more nuanced picture. Under the ongoing recapitalisation framework supervised by the Central Bank of Nigeria, Nigerian banks reportedly raised approximately N4.65 trillion by April 2026. Meanwhile, the Nigerian Exchange All-Share Index posted substantial gains during the first quarter of 2026.
Markets, at least thus far, appear to have interpreted regulatory assertiveness as evidence of supervisory continuity rather than systemic instability.
Stewardship Versus Seizure
The structural vulnerability at the centre of this controversy did not originate with the regulator. It originated with an acquisition allegedly financed through debt, transferred onto the balance sheet of the acquired institution, and left materially exposed to exchange-rate volatility.
In that context, the intervention by the Central Bank of Nigeria resembles the type of prudential action central banks across major financial jurisdictions routinely undertake when systemic institutions become vulnerable.
Equally significant is the fact that the legally constituted board of Union Bank of Nigeria subsequently filed its own appeal, signalling an institutional recognition that the dispute is ultimately about governance, solvency, and regulatory authority — not institutional dismantling.
Nigeria’s appellate courts, not the court of commentary, are the proper venue for resolving those questions.
At 109 years old, Union Bank of Nigeria remains one of Nigeria’s oldest banking institutions, serving millions of depositors whose primary concern is continuity, stability, and protection of their funds. The institution is not being liquidated. Operations remain active. Depositors remain protected. Regulatory supervision remains in force.
In the language of institutional governance, that is called stewardship — not seizure.
Bala Rabiu writes from Kano.
