Union Bank Acquisition In Controversy As Lawyers Want CBN Approval Cancelled

Approval for the take over of Union Bank plc by Titan Trust Bank granted by the Central Bank of Nigeria (CBN) has since stirred controversy over the process of the acquisition.

A team of Senior lawyers led by Mr A.M. Makinde have approached a Federal High Court in Lagos, to seek the nullification of the approval given by CBN for the acquisition of the financial institution.

The lawyers who filed the action on behalf of Dr Charles Mekunye (SAN), an investor in Union Bank, stated that the CBN’s approval of the transaction was in flagrant disrespect to the authority, sanctity, dignity and powers of the court, thereby declaring it as unlawful, unconstitutional, null and void.

Dr Mekunye through his lawyers had earlier sued Union Global Partners Ltd (first defendant) and Atlas Mara Limited (second defendant) over the sale of their majority shares in Union Bank (fourth defendant) to Titan Trust Bank (third defendant).

READ ALSO: Titan’s Union Bank Acquisition A Rescue Or Inorganic Growth Mission?

According to the suit filed by Mekunye, the sale of the shares jointly by Union Global Partners and Atlas Mara Ltd as required by law were not traded on Nigerian Exchange Limited instead it was done by private treaty, thereby declaring it unlawful and invalid.

He argued that Union Global Partners and Atlas Mara Ltd selling Union Bank to TTB did not follow the extant laws of Nigeria regulating such transaction.

Mekunye’s lawyers also argued that Titan Trust Bank two years back was granted a banking license which had not broken even and lacked the financial capacity to purchase Union Bank.

CBN was joined in the suit number FHC/L/CS/674/2022 as a co-defendant. It was served with the court processes and an interlocutory injunction on all actions of the transactions pending the determination of the suit but it however announced the official approval of Union Bank sales to TTB.

Mekwunye’s motion was brought pursuant to Order 35 Rules 1 & 2 of the Federal High Court Civil Procedure Rules 2019 and Section 36 (1) of the Constitution of the Federal Republic of Nigeria, 1999.

The reliefs granted include:

• An order of Mandatory Injunction for a return to status quo by setting aside the approval of the Sale and Transfer of shares of the 4th Defendant by the 1st and 2nd Defendant to the 3rd Defendant by the 5th Defendant having been unlawfully approved in contempt of Court.

• An order of Mandatory Injunction nullifying all steps and/or measures taken by the defendants to consummate the transaction of transfer and sale and/or acquisition of shares of Union Bank by the 3rd Defendant in flagrant disrespect to the Court.

• An Order of Mandatory Injunction returning the parties to the status quo as at the first date CBN appeared in court through its Counsel in response to the Originating Summons of May 24, 2022.

• An order that the CBN is in contempt of Court for approving the unlawful transaction, resulting in the 3rd Defendant’s acquisition of the 4th Defendant/Respondent as evidenced by the 4th Defendant’s circular of June 2, 2022, inspite of the suit pending before the Court, including the Motion on Notice for Interlocutory injunction filed on May 11, 2022 which is pending before this Court.

• An order that the Defendants’ failure and/or refusal to maintain “status quo” in the pending suit before the Court undermines the powers and authority of the Court.