The Federal High Court in Lagos has been asked to halt the acquisition of Union Bank of Nigeria (UBN) by Titan Trust Bank, following disagreement between majority shareholders and minority investors.
Ripples Nigeria had reported last month that majority shareholders, Union Global Partners Limited and Atlas Mara Limited structured a deal with Titan Trust Bank Limited to takeover Union Bank.
Titan Trust Bank acquired 93.41 percent stake in Union Bank, worth about N100 billion. The acquisition resulted to the Chief Executive Officer, Emeka Okonkwo, and nine other executives resigning from UBN.
The deal, however, doesn’t excite all shareholders, as lawyers and SANs; Charles Mekwunye and A.M. Makinde, requested that the court nullify the takeover agreement and return both parties to status quo, on Monday.
In the suit numbered FHC/L/CS/674/2022, the plaintif described the acquisition as invalid and unlawful, stating that it doesn’t follow the law. According to them, rather than the deal taking place on the trading floor of the Nigerian Stock Exchange, the majority shareholders and the new investor concluded on the agreement through private treaty.
The FHC was informed that Titan Trust Bank wasn’t profitable enough to takeover Union Bank, and doesn’t possess the financial requirements, having only secured its banking license two years ago.
Part of their prayers was that the court label the approval of the deal by the Central Bank of Nigeria (CBN), which is one of the co-defendants, as unconstitutional and a disrespect to the law.
Mekwunye prayed for “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 fourth defendant by the first and second defendants to the third defendant by the fifth defendant having been unlawfully approved in contempt of court.”
They prayed for “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 third defendant in flagrant disrespect to the court”.
The investors further requested for “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 third defendant’s acquisition of the fourth defendant/respondent as evidenced by the fourth defendant’s circular of June 2, 2022, in spite 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.”
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