Stewardship, Not Seizure: What the Union Bank Case Is Really About

There is a particular genre of financial commentary that mistakes legal process fora factual verdict. A court delivers a first-instance ruling, procedural questions areraised, and before the ink is dry on the appeal filing, the narrative has alreadyhardened: the regulator overreached, investor confidence is shattered, andNigeria’s financial governance is on trial before the world. Much of thecommentary currently circulating about Union Bank of Nigeria belongs to thatgenre. It is not without merit on certain procedural questions. But it is, at its core,incomplete — and incompleteness in financial journalism carries costs that runwell beyond the column.The Acquisition That Started EverythingIn 2022, Titan Trust Bank Limited, then chaired by Mr Tunde Lemo, acquiredapproximately 94 per cent of Union Bank of Nigeria through two Dubai-registeredentities: Luxis International DMCC, promoted by Mr Rahul Savara, and MrCornelius Vink’s Magna International DMCC, both linked to the Tropical GeneralInvestments (TGI) Group. The US$300 million transaction was financedpredominantly through an Afreximbank facility. The CBN’s policy is unambiguous:borrowed funds may not be used to acquire shares in a licensed financialinstitution. That principle exists because debt-funded acquisitions hollow out thevery capital base they purport to build.That is precisely what happened. A forensic audit found that the Afreximbank loanwas ultimately reflected in Union Bank’s own books, with no hedgingarrangements against naira depreciation. As the currency weakened, revaluationlosses intensified, the capital adequacy ratio deteriorated into negative territory,non-performing loan exposure increased significantly, and a substantial capitalshortfall emerged. Critically, as stated in the Bank’s own Notice of Appeal, aspecial examination was conducted, and its findings were formally presented toformer Managing Director Mudassir Amray and the board then chaired by FaroukGumel, who were confronted with the institution’s grave financial condition andcontinuing regulatory infractions. The claim that the CBN acted without evidencebefore dissolving the board is, on the record, simply not accurate.The Legal PictureThe CBN acted under Section 34 of BOFIA 2020 and Section 52 of the CBN Act2007 — broad discretionary executive powers that do not require a specialexamination as a condition precedent. The Federal High Court’s characterisationof those powers as quasi-judicial is itself among the central questions now onappeal. Both the CBN and Union Bank have filed formal appeals. Union Bank’sown Notice of Appeal, filed the day after judgment on thirteen grounds and arguedby Olaniwun Ajayi LP, challenges the ruling on several fronts: that therespondents may never have had locus standi to sue in the first place, under therule in Foss v. Harbottle; that the application was filed nearly two years after theJanuary 2024 events, well outside the prescribed three-month limitation window;and that the CBN-supervised recapitalisation exercise, mandated under Section 9of BOFIA, cannot constitute evidence of bad faith. These are not technicalities.They are substantive questions of law that the Court of Appeal must nowdetermine.The Human Stakes and the Real QuestionBehind the legal arguments sit approximately 7.8 million depositors and around6,450 employees across 281 branches. Union Bank’s own affidavit describes it as asystemically important institution in a precarious financial situation, continuing torely on CBN forbearance for its existence — a frank admission that validates,rather than undermines, the case for intervention. Meanwhile, critics argue thedispute damages investor confidence. The wider evidence does not support thatconclusion. By April 2026, thirty-three Nigerian banks had raised N4.65 trillionunder the CBN’s recapitalisation framework — over ten times the 2004 to 2005consolidation figure. The Nigerian Exchange All-Share Index rose approximately29 per cent in the first quarter of 2026 alone. The market has read the CBN’sresolve as stability, not recklessness. Conflating this case with a systemicconfidence crisis runs the risk of misleading the very international investors thecommentary claims to be protecting.The structural vulnerability at the centre of this dispute originates not with theregulator but with an acquisition financed with borrowed funds, loaded onto theacquired institution’s balance sheet, and left unhedged against exchange-raterisk. When the CBN stepped in, it was doing what central banks everywhere areexpected to do. When Union Bank’s own legally constituted board subsequentlyfiled its own appeal, it was signalling what a properly constituted governancestructure recognises as being in the institution’s best interests. Nigeria’sappellate courts — not the court of commentary — are the appropriate arena forresolution.Union Bank of Nigeria is a 109-year-old institution serving nearly eight milliondepositors. It is not being dismantled. It is being stabilised under active regulatorysupervision, with operations intact and depositors protected. In the language ofinstitutional governance, that is called stewardship. The commentary thatmistakes it for anything else does the institution, its depositors, and Nigeria’sfinancial governance narrative a disservice that will outlast the headlines.*Bala Rabiu, writes from Kano