COURT HALTS BID TO TAKE OVER UNION BANK
Fresh move to recapitalize the Union Bank of Nigeria Plc has hit the rocks as a Federal High Court sitting in Lagos granted an interim order of injunction restraining Messrs African Capital Alliance Consortium, the proposed core investor from proceeding with the transaction.
The plaintiff, Union Bank of Nigeria Pensioners Association currently holding 1, 200, 000 units of its shares of the bank had brought the action to stop the acquisition bid on the ground that the board of the bank failed to follow the laid down procedure as stipulated in its Memorandum and Article of Association.
Ruling on the Ex-parte Motion brought by the plaintiff and argued by their lawyer, Femi Falana supported by Dare Falana, Justice Stephen Adah stopped the bid in an interim order granted to the plaintiff.
The motion ex-parte which is supported by a seven paragraph affidavit deposed to by one Olalekan Oganla who among others averred that the plaintiff is a share holder and a member of the defendant having 1, 200, 000 units of its shares.
He averred that the defendant had concluded arrangements to invite Messrs African Capital Alliance Consortium to invest the sum of $750 million in the defendant's without first offering it to the plaintiff and other share holders. The deponent further averred that it had forwarded a letter to the governor of Central Bank demanding for clarification on the issue of recapitalization.
The CBN had however in a letter dated October 7, 2010, denied any involvement in the recapitalization of banks including the defendant and further stated that it is an exclusive matter for the bank's board and share holders. According to the deponent, the Memorandum and Article of Association of the defendant expressly stipulates the manner in which its share capital may be altered.
'Surprisingly, on March, 24, 2011, the defendant yet published another press statement in various national dailies signifying its readiness to invite Messrs African Capital Alliance Consortium to invest the sum of $750 million in the defendant without first offering it to the plaintiff and other shareholders.
'As a shareholder, the plaintiff has a stake in the fortunes and future of the defendant, and any step taken by the defendant without the consent of the plaintiff will affect its interest,' he averred.
Arguing the motion, Falana urged the court to restrain the defendant from going ahead with its intention to invite Messrs African Capital Alliance Consortium to invest a sum of $750 million which would make it the new core investor in the bank. Further in his submission, he argued that the defendant had failed to comply with the extant provisions of its Memorandum and Article of Association which clearly stipulated the process and procedure under which third party investors could be invited to come and invest in the bank.
Specifically, he submitted that the plaintiff as of right ought to have been notified and invited to come and invest in the defendant as stipulated in its Memorandum and Article of Association before any third party could be offered such opportunity to come and invest in the defendant. He contended that it is only when and if the plaintiff and other existing shareholders' wave their rights to invest that such opportunity could be extended to a third party.