The Central Bank of Nigeria (CBN) has sacked the board of directors of three banks, Keystone Bank, Polaris Bank, and Union Bank, in a meeting at Abuja, the nation’s capital. A high-ranking CBN official confirmed the development to TechCabal. Per the CBN, the affected banks committed infractions ranging from “regulatory non-compliance to corporate governance failure.” The apex bank said they were also involved in activities threatening their financial stability.

The sack comes weeks after Jim Obazee, a special investigator appointed by President Bola Tinubu to probe the activities of the Central Bank under Godwin Emefiele, the CBN’s immediate past governor, claimed that Emefiele used proxies to acquire Union Bank of Nigeria for Titan Trust Bank Limited. 

A statement from the CBN signed by its director of corporate communications claimed that the dissolution of the boards of the affected banks “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.”

Special Investigator’s report

Jim Obazee’s report alleged that Emefiele’s proxies also acquired Keystone Bank and Polaris Bank without any evidence of payment. According to the report, Emefiele used two Dubai-based companies, Luxis International DMCC and Magna International DMCC, to set up Titan Bank. According to Section 3(5) of the Banks and Other Financial Institutions Act, both companies are not legally allowed to operate or acquire a bank in Nigeria.

After Titan Bank was set up, the bank sought CBN’s no objection in 2021 to its proposed consolidation with Union Bank by acquiring 91.5% of Union Bank’s shares and an eventual merger between both banks. By 2022, Titan Bank had acquired 93.4% of Union Bank’s shares. According to the report, Keystone Bank was acquired by a special-purpose vehicle led by Isa Funtua and Emefiele and was financed by a N25 billion loan from Heritage Bank.

The report also advised that the federal government takeover all four banks due to the “illegality” of the transaction.

“We have completed our investigation on this acquisition and we are on the verge of recovering these two banks for the Federal Government,” a report by a special investigator said in December.

*This is a developing story

*An earlier version of this story stated Titan Bank was one of the affected banks. Recent communication from the CBN suggests Titan Bank was not affected.