House of Reps Direct SEC to Halt Activities on Union Banks Capital Restructuring Exercise

The House of Representatives Committee on Capital Markets has asked the Director General of the Securities and Exchange commission, Dr. Arunma Oteh to halt any further approvals to Union Bank as regards its capital restructuring exercise.

Union Bank, one of the lenders rescued by the CBN, received a strategic investment from African Capital Alliance, a private equity firm based in Lagos, Nigeria. This investment will undoubtedly require a capital restructuring in order to pave way for the new investors.

However shareholder groups are speaking out against the transparency of the transaction and alleging that they are not being carried along in a process brimming with irregularities. Several petitions to the lawmakers have caused them to take action.

In a letter sent to the DG of SEC, the Chairman of the Legislative Committee, Herman Hembe stated, “In view of the inability of the management of Union Bank of Nigeria Plc. to provide key answers to various queries this committee has raised relating to Union Banks’ compliance with rules, procedure and statutes guiding Rights issues placing and Capital reorganization, we request that the SEC withhold further approvals of the said transaction, pending the outcome of hearing where Union Bank will be expected to come with relevant documents and information, regarding the matter in question. Please take very serious note.”