The Central Bank of Nigeria (CBN) has dissolved the boards of Union Bank, Keystone Bank and Polaris Bank.
The apex bank in a statement by Ag. Director, Corporate Communications, Mrs Sidi Ali Hakama, said the dissolution became necessary due to the non-compliance of these banks and their respective boards with the provisions of Section 12(c), (f), (g), (h) of Banks and Other Financial Institutions Act, 2020.
The statement added that the Bank’s infractions vary from regulatory non-compliance, corporate governance failure, disregarding the conditions under which their licenses were granted, and involvement in activities that pose a threat to financial stability, among others.
“The Central Bank of Nigeria (CBN) has dissolved the Board and Management of Union Bank, Keystone Bank, and Polaris Bank.
“This action became necessary due to the non-compliance of these banks and their respective boards with the provisions of Section 12(c), (f), (g), (h) of Banks and Other Financial Institutions Act, 2020.
“The Bank’s infractions vary from regulatory non-compliance, corporate governance failure, disregarding the conditions under which their licenses were granted, and involvement in activities that pose a threat to financial stability, among others.
“The CBN assures the public of the safety and security of depositors’ funds and remains resolute in fulfilling its mandate to uphold a safe, sound, and robust financial system in Nigeria. Our Banking system remains strong and resilient,” the statement reads.
The affected banks were indicted by the special investigations committee which President Bola Tinubu set up to probe the CBN under Godwin Emefiele, former governor of the apex bank.
After suspending Emefiele in June, Tinubu had named Jim Obazee as the special investigator of the CBN.
In a memo submitted to the president at the end of the probe, Obazee said Emefiele used “ill-gotten wealth” to establish TTB and subsequently acquired Union Bank and Keystone Bank through his proxies.
The memo, titled “Report of the Investigation of the Acquisition of Union Bank of Nigeria by Titan Trust Bank,” outlined the specific steps allegedly taken to secure Union Bank.
The report also indicted a late ally of former President Buhari, Ismaila Isa Funtua, in the acquisitions of Keystone and Polaris banks.
The special investigator had recommended that the banks be forfeited to the federal government.
But reacting, Tunde Lemo, Chairman of Titan Trust Bank, insisted that his bank followed due process and met all regulatory requirements in its acquisition of Union Bank.
In an interview, Lemo, a former deputy governor of the CBN, said: “The core shareholders and the banks will respond appropriately. Due process was followed in the establishment of Titan Trust Bank and every process that led to the acquisition of Union Bank was verified by the CBN, SEC and other regulators. The core shareholders will respond to the specific allegations against them.”
Lemo warned that the publication of “unverified information” on banks could have adverse effects on the banking industry.
“I sincerely recommend caution in the publication of unverified information about these financial institutions as they are both deposit-taking institutions. The good news is that the banks are healthy and stable,” he added.
Subsequently, the Obaze probe committee summoned Lemo and other shareholders of Titan Trust.
The apex bank took the decision to dissolve the boards of the banks at a meeting in Abuja, sources told Daily Trust Wednesday night.
The management and boards of the affected banks alongside the CBN Special Investigator were said to have attended the meeting.
It is unclear if the step is in the direction of the recommendation that the banks would be taken over by the Federal Government as details of the meeting are yet to be made public.
