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

There is a particular genre of financial commentary that mistakes legal process for

a 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 has already

hardened: the regulator overreached, investor confidence is shattered, and

Nigeria’s financial governance is on trial before the world. Much of the

commentary currently circulating about Union Bank of Nigeria belongs to that

genre. It is not without merit on certain procedural questions. But it is, at its core,

incomplete — and incompleteness in financial journalism carries costs that run

well beyond the column.

The Acquisition That Started Everything

In 2022, Titan Trust Bank Limited, then chaired by Mr Tunde Lemo, acquired

approximately 94 per cent of Union Bank of Nigeria through two Dubai-registered

entities: Luxis International DMCC, promoted by Mr Rahul Savara, and Mr

Cornelius Vink’s Magna International DMCC, both linked to the Tropical General

Investments (TGI) Group. The US$300 million transaction was financed

predominantly through an Afreximbank facility. The CBN’s policy is unambiguous:

borrowed funds may not be used to acquire shares in a licensed financial

institution. That principle exists because debt-funded acquisitions hollow out the

very capital base they purport to build.

That is precisely what happened. A forensic audit found that the Afreximbank loan

was ultimately reflected in Union Bank’s own books, with no hedging

arrangements against naira depreciation. As the currency weakened, revaluation

losses intensified, the capital adequacy ratio deteriorated into negative territory,

non-performing loan exposure increased significantly, and a substantial capital

shortfall emerged. Critically, as stated in the Bank’s own Notice of Appeal, a

special examination was conducted, and its findings were formally presented to

former Managing Director Mudassir Amray and the board then chaired by Farouk

Gumel, who were confronted with the institution’s grave financial condition and

continuing regulatory infractions. The claim that the CBN acted without evidence

before dissolving the board is, on the record, simply not accurate.

The Legal Picture

The CBN acted under Section 34 of BOFIA 2020 and Section 52 of the CBN Act

2007 — broad discretionary executive powers that do not require a special

examination as a condition precedent. The Federal High Court’s characterisation

of those powers as quasi-judicial is itself among the central questions now on

appeal. Both the CBN and Union Bank have filed formal appeals. Union Bank’s

own Notice of Appeal, filed the day after judgment on thirteen grounds and argued

by Olaniwun Ajayi LP, challenges the ruling on several fronts: that the

respondents may never have had locus standi to sue in the first place, under the

rule in Foss v. Harbottle; that the application was filed nearly two years after the

January 2024 events, well outside the prescribed three-month limitation window;

and that the CBN-supervised recapitalisation exercise, mandated under Section 9

of BOFIA, cannot constitute evidence of bad faith. These are not technicalities.

They are substantive questions of law that the Court of Appeal must now

determine.The Human Stakes and the Real Question

Behind the legal arguments sit approximately 7.8 million depositors and around

6,450 employees across 281 branches. Union Bank’s own affidavit describes it as a

systemically important institution in a precarious financial situation, continuing to

rely on CBN forbearance for its existence — a frank admission that validates,

rather than undermines, the case for intervention. Meanwhile, critics argue the

dispute damages investor confidence. The wider evidence does not support that

conclusion. By April 2026, thirty-three Nigerian banks had raised N4.65 trillion

under the CBN’s recapitalisation framework — over ten times the 2004 to 2005

consolidation figure. The Nigerian Exchange All-Share Index rose approximately

29 per cent in the first quarter of 2026 alone. The market has read the CBN’s

resolve as stability, not recklessness. Conflating this case with a systemic

confidence crisis runs the risk of misleading the very international investors the

commentary claims to be protecting.

The structural vulnerability at the centre of this dispute originates not with the

regulator but with an acquisition financed with borrowed funds, loaded onto the

acquired institution’s balance sheet, and left unhedged against exchange-rate

risk. When the CBN stepped in, it was doing what central banks everywhere are

expected to do. When Union Bank’s own legally constituted board subsequently

filed its own appeal, it was signalling what a properly constituted governance

structure recognises as being in the institution’s best interests. Nigeria’s

appellate courts — not the court of commentary — are the appropriate arena for

resolution.

Union Bank of Nigeria is a 109-year-old institution serving nearly eight million

depositors. It is not being dismantled. It is being stabilised under active regulatory

supervision, with operations intact and depositors protected. In the language of

institutional governance, that is called stewardship. The commentary that

mistakes it for anything else does the institution, its depositors, and Nigeria’s

financial governance narrative a disservice that will outlast the headlines.

*Bala Rabiu, writes from Kano