CBN sacks Union, Keystone, Polaris boards for non-compliance with Section 12(c), (f, (g),) of BOFI Act, 2020

Nigeria’s regulatory financial institution the Central Bank of Nigeria has sacked the entire Board of Directors governing Polaris, Union and Keystone Banks.

CBN announced the decision in a statement Wednesday night following the recommendation of the Special Investigator, Jim Obazee, appointed by President Bola Tinubu in July 2023.

Obazee was appointed to probe the activities of the CBN and other relevant establishments.

The statement Wednesday accused the banks of regulatory non-compliance, corporate governance failure, among others.

“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), th) of Banks and Other Financial institutions Act, 2020,” a press statement by the bank’s spokesperson, Sidi Hakama, said.

The CBN said the banks’ infractions vary from regulatory non-compliance, corporate governance failure, disregarding the conditions under which their licenses were granted, and involvement in activities that threaten financial stability, among others.

Obazee noted in the report he submitted to President Bola Tinubu on 20 December that the former governor of Central Bank of Nigeria (CBN), Godwin Emefiele, used “ill-gotten wealth” to establish TTB and used it to acquire Union Bank and Keystone Bank through some persons serving as his proxies.

Mr Obazee’s investigations revealed questionable ownership and loans linked to Mr Emefiele. He had also recommended that the banks be forfeited to the federal government.

In its defence, Tropical General Investment Group (TGI) explained that the USD500 million capital used to pay for the acquisition of Union Bank was transparent and unimpeachable; it also said due process was followed in the acquisition.

“The entire transaction was managed by highly reputed global financial institutions including Rothschild and Citibank.

“A USD 300 million loan was sourced from African Export-Import Bank (Afrexim) and the rest of the capital was sourced from the proceeds of TGI’s sales of its Chi Ltd business to Coca-Cola, all to finance the acquisition of Union Bank,” it said.