CBN Sacks Boards of Union Bank, Keystone Bank and Polaris Bank

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The Central Bank of Nigeria (CBN) has officially dissolved the Board and Management of three prominent banks: Union Bank, Keystone Bank, and Polaris Bank. In a press release dated January 10, 2024, the CBN highlighted that this action was taken due to the banks’ non-compliance with critical regulatory provisions, specifically Section 12(c), (f), (g), (h) of the Banks and Other Financial Institutions Act, 2020, encompassing various regulatory and governance expectations.

The CBN identified several concerns leading to this decision, including regulatory non-compliance, failures in corporate governance, and engagement in activities threatening financial stability.

Mrs. Sidi Ali Hakama, the Acting Director of Corporate Communications at the CBN, stated, “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, mandated to ensure a safe and resilient banking environment for all Nigerians, reassured the public that the safety and security of depositor funds remain a top priority. Mrs. Sidi Ali Hakama emphasized the Bank’s commitment to uphold and protect the financial system within the country.

In a recent development, the Special CBN Investigator, Jim Obazee, summoned Titan Trust Bank’s chairman, Babatunde Lemo, for questioning regarding TTB’s acquisition of Union Bank of Nigeria Plc (UBN).

The investigator’s report alleged that proxies, linked to a former CBN Governor, Godwin Emefiele, were used to establish Titan Trust Bank and acquire Union Bank. However, Titan Trust Bank denied any wrongdoing in a press release.

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Polaris Bank also faced controversy in 2022, with allegations of a higher purchase offer during its sale compared to the accepted offer. The CBN refuted these claims, asserting that the divestment from Polaris Bank was overseen by a Divestment Committee comprising senior representatives of AMCON & CBN, supported by reputable legal and financial advisers.

In the context of the ongoing investigations, the current CBN, led by Yemi Cardoso, is probing alleged wrongdoings during the tenure of Godwin Emefiele.

A leaked report by the Special Investigation on the Central Bank of Nigeria and other entities raised concerns about financial and legal irregularities during Emefiele’s leadership at the CBN.

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