Court declines Petro Union’s request to halt sale of majority stake in Union Bank

A federal high court in Lagos has refused an application filed by Petro Union Oil and Gas Company Limited to stop Union Bank of Nigeria Plc from accepting or offering for sale its assets.

In 2014, the court presided over by the late Justice Adamu Abdu-Kafarati, had delivered a judgment in favour of Petro Union in a suit marked 2014 FHC/ABJ/M/104/2012 filed against the CBN, Union Bank, minister of finance and the attorney-general of the federation.

Kafarati had ordered the banks to pay £2.556 billion and an interest of 15% per annum from 22nd June 1995 until payment is made to the oil firm.

Together with interest, the debt amounts to over $15 billion.

In an attempt to enforce the judgment, Petro Union approached the federal high court in June 2021 through a motion ex parte seeking an order of interim injunction restraining Union Bank from accepting or offering for sale its assets in any manner pending the determination of the suit.

It asked the court to make an order directing maintenance of status quo and suspending all actions, proceedings and processes relating to the intended sale of Union Bank’s assets pending the hearing and determination of the motion on notice of which the court granted the motion ex parte.

Upon being served, Union Bank, through its lawyer, Olaniwun Ajayi, applied to set aside the ex-parte which the Petro Union was seeking to make permanent.

Ajayi also filed other processes in opposition to the motion on notice.

Union Bank argued that a litigant cannot prevent a shareholder of a company with which it is involved in litigation from selling its shares and that such an action by a shareholder cannot be imputed to the company.

The bank’s lawyers further argued that an appeal and an application for stay of execution against the judgment sought to be enforced were pending at the supreme court.

They added that a case of fraud and forgery was pending against Petro Union and its directors at the federal high court.

Delivering a ruling on Thursday, Daniel Osiagor, the presiding judge, referred to a Bloomberg publication, which read in part: “Atlas Mara Limited, the London Stock Exchange-listed pan-African banking group started by Mr Bob Diamond has received a number of approaches for its 49.97 per cent holding in Lagos-based Union Bank of Nigeria.”

The judge held that — from the quoted paragraph — it is Atlas Mara Limited that received offers for the sale of its shares in Union Bank.

He held that shares belonging to shareholders is not the same as the assets of a company, hence the court cannot prevent a shareholder from selling its shares.

The court also declined to make any preservatory order because of the appeal pending at the supreme court.

Osiagor further stated that there was no threat to the ‘res’ to necessitate a preservatory order of the court, thus dismissing the originating summons filed by Petro Union.

In December, Union Bank ‭disclosed that Union Global Partners Limited, Atlas Mara Limited and other existing shareholders agreed to divest 89.39 percent shareholding in Union Bank to‬ Titan Trust Bank Limited (TTB).

The transaction is‬ subject ‭to‬ regulatory approvals ‭and‬ other financial conditions.