A group of lawyers have threatened to challenge the recent acquisition of 89.39 % stake in Union Bank Plc by Titan Trust Bank Limited before the court.
Union Bank Plc and Titan Trust Bank had on December 23, 2021, announced that Union Bank’s core investors, Union Global Partners Limited, Atlas Mara Limited, and other shareholders had reached an agreement with Titan Trust Bank to sell and transfer their shareholding in the country’s second oldest bank to Titan Trust.
But addressing a press conference in Lagos, the lawyers led by Adedotun Makinde, SAN and Dr. Charles Mekwunye, SAN faulted the transaction saying that it is strange that a privately owned bank that has neither published it’s account nor broken even would suddenly purchase one of the oldest bank in the country.
Insisting that the transaction was not in violation of several sections of Companies and Allied Matters Act, 2020, CAMA, including Section 342(2), the lawyers noted that the sale and transfer of shares of the Union Bank to Titan Trust Bank is a flagrant abuse of financial regulations.
They said: ” Everything is wrong with Union Bank transfer to Titan Bank and as stakeholders if we do nothing, a lot of things will go wrong. A lot of Nigerians will loose their jobs. We know with our vast experience in the sector that if a small bank swallows a big bank, the casualties will be too much.
“We are also surprised that the Economic and Financial Crimes Commission, EFCC has not looked into this transaction to know where such huge amount of money to purchase Union Bank is coming from. We know that if the right questions are asked, that transaction will not proceed so we are going to use the instrument of the law to ensure that the right thing is done.”
As part of the legal process to stop the Union Bank/Titan Bank transaction, the lawyers have written separate letters written to the Governor of the Central Bank of Nigeria (CBN) and the Director-General, Securities and Exchange Commission (SEC) demanding full details of the transaction.
In a letter to the CBN dated March 14, 2022, signed by Mr. Adedokun Makinde, SAN, titled ‘Unlawful Sale and Transfer of the Majority Shares of Union Bank to Titan Bank Limited and Violation of the CBN Code of Corporate Governance for Banks and Discount Houses and Other statutory law,” the lawyers requested for the date the sale, and transfer of all the shares of Union (United) Global Partners Limited, and Atlas Mara Limited were consummated on the floor of the Nigerian Exchange Limited as required by Section 106 (4) of the Investment, and Securities Act, 2007.
The letter also demanded details particulars/reports of the sale of the shares of Union (United) Global Partners Limited and Atlas Mara Limited in Union Bank of Nigeria to Titan Trust Bank limited in the record of the Apex Bank.
It warned that failure to provide the information requested within seven days, they would have no option but to seek further legal recourse to compel the apex court to provide the information.
However, the CBN in a letter signed by its Director/Secretary to the Board, Aminu Mohammed, acknowledged the letter, stating that ”the information being sought, where available, will be communicated to you in due course.”
A similar letter written to the Director-General, SEC, also alleged that the transaction was marred with unlawful abuse of the process of sale and transfer of shares in banks in Nigeria.
The letter read: “The report reaching our client also confirms that the transaction leading to the unlawful acquisition of Union Bank Plc by Titan Bank Limited failed to adhere to the provisions of the Central Bank of Nigeria Code of Corporate Governance for Banks and Discount Houses in Nigeria, the Companies and Allied Matters Act and other extant laws.
‘That we take cognisance of the fact that the CBN approves financial transactions of all banks and approves all transfers of funds. Also based on our findings, we are very much aware that the CBN in respect to this sale and transfer of shares transaction of Union Bank Plc to Titan Bank Limited will have the records.
“The CBN must approve the transfer of funds used by Titan Bank Ltd to consummate this transaction.
“Further to these findings, we also discovered that Union Bank Plc has existed in Nigeria for about 100 years whereas Titan Trust Bank Limited was incorporated about two years and started banking about 18 months ago. Therefore, we know that Titan Trust Bank Limited has not made profits and has not broken even.
“Therefore, the source of the finance of the said majority shares by Titan Trust Bank Limited cannot be from its profits and we demand strict disclosure as required by law.”
The lawyers also wrote to Union Bank demanding for details of the said transaction with Titan Bank.
Responding to the letter, Union Bank through its lawyer, Mesuabari Mene-Josiah from the law firm of Udo Udoma and Bello-Osagie, stated that the transaction was privately negotiated sales of shares between the shareholders of the bank.
It stressed that Union Bank was not a party to the negotiations and/or the share sale and purchase agreement executed between the Selling Shareholders and TTB.