In a landmark judicial intervention that has sent shockwaves through the Nigerian financial sector, the Federal High Court sitting in Lagos has officially nullified CBN’s takeover of Union Bank, describing the apex bank’s actions as an overreach of its regulatory powers. Delivering a detailed judgment on Wednesday, March 25, 2026, Justice Ambrose Lewis-Allagoa ruled that the Central Bank of Nigeria acted arbitrarily when it dissolved the board of Union Bank and appointed new management in early 2024.
The court held that the regulator failed to follow the mandatory procedural safeguards outlined in the Banks and Other Financial Institutions Act (BOFIA) 2020, effectively stripping the apex bank of its unilateral authority to seize control of a commercial entity without a proven and documented case of financial distress.
The legal battle was initiated by Union Global Acquisitions Limited and other core shareholders who challenged the sudden removal of the board led by former Chairman Farouk Gumel and Managing Director Mudassir Amray. In its defense, the Central Bank had cited alleged non-compliance with corporate governance codes and issues surrounding the ultimate beneficial ownership of the bank.
However, the presiding judge noted that the CBN failed to provide substantial evidence that Union Bank was in a precarious financial state or that its depositors’ funds were at risk at the time of the intervention. The court emphasized that while the CBN holds significant supervisory powers, such powers must be exercised within the ambit of the law and cannot be used as a tool for administrative intimidation against private investors.
With this ruling, the court has ordered the immediate reinstatement of the dissolved board of directors and the return of the bank’s management to the core shareholders. Justice Lewis-Allagoa further directed the CBN and its appointed management team to vacate the premises of Union Bank and refrain from interfering with its day-to-day operations.
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The judgment also voided the appointment of Yetunde Oni, who had been serving as the CBN-appointed Managing Director, and restored the original leadership structure. Legal experts suggest this verdict serves as a critical check on the “draconian” application of regulatory oversight, reinforcing the principle that private property and corporate structures are protected by constitutional guarantees.
The financial community has reacted with cautious optimism, as the reversal of CBN’s takeover of Union Bank is expected to restore investor confidence in the transparency of the Nigerian banking environment. Throughout the proceedings, the plaintiffs argued that the takeover had caused significant reputational damage and led to a dip in the bank’s market valuation.
By restoring the original board, the court has essentially handed a lifeline to the core shareholders who have consistently maintained that the acquisition of the bank followed all legal and regulatory protocols at the time of purchase.
As at the close of business on Wednesday, the Central Bank of Nigeria had not released an official statement regarding whether it intends to appeal the judgment at the Court of Appeal. However, the immediate implication of the ruling is a total shift in the leadership of one of Nigeria’s oldest financial institutions.
The restored board is expected to convene an emergency meeting within the next forty-eight hours to chart a path forward and reassure customers and stakeholders of the bank’s stability. This case remains a pivotal reference point for corporate law in Nigeria, highlighting the delicate balance between necessary financial regulation and the rights of private shareholders.