Nigeria: Lawyers Ask Court to Nullify Acquisition of Union Bank by Titan Trust Bank

Some senior lawyers have approached a Federal High Court in Lagos, asking the court to nullify the approval given by the Central Bank of Nigeria. for the acquisition of Union Bank by Titan Trust Bank.

The lawyers led by Mr. A.M Makinde, for Dr. Charles Mekwunye, in a motion sought a declaration that the CBN’s approval of the transaction was in flagrant disrespect to the authority, sanctity, dignity, and powers of the Court and therefore unlawful, unconstitutional, null and void.

Specifically, they contended that the sales of Union Bank to Titan Trust Bank by Union Global Partners and Atlas Mara Ltd did not follow the extant laws of Nigeria regulating such transactions.

Mekwunye had earlier dragged Union Global Partners Ltd (1st defendant) and Atlas Mara Limited (2nd defendant ) to the court over the sales of their majority shares in Union Bank (4th defendant) to Titan Trust Bank (3rd defendant).
In the suit, Mekwunye, also a Union Bank shareholder, had contended that Union Bank’s sales to Titan Trust Bank by Union Global Partners and Atlas Mara Ltd did not follow extant laws of Nigeria regulating such transactions.
He also contended that Titan Trust Bank which was granted a banking licence two years ago with two branches has not broken even and does not have the financial capacity to acquire Union Bank.

According to court processes filed by Mekwunye, the sale of the combined shares of Union Global Partners and Atlas Mara Ltd, in Union Bank were made by private treaty instead of being traded on the floor of the Nigerian Exchange Limited, as required by law thereby making the transaction invalid and unlawful.

The CBN was joined in the suit number FHC/L/CS/674/2022 as a co-defendant and was serviced with the court processes and interlocutory injunction seeking a stay of all actions on the transaction pending the determination of the suit.
However, while the suit was still pending before the court, the CBN announced the official approval of Union Bank sales to Titan Trust Bank.

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 plaintiffs are, “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.”

Wale Igbintade

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