Union Bank Begins Rights Issue, Possibly In Defiance of House Committee’s Instructions

Union Bank has begun issuing 1.4 billion ordinary shares at N 6.81 to existing shareholders as part of a planned rights issue that already has SEC approval.

This comes after the House Committee on Capital Markets asked the Securities and Exchange Commission (SEC) to halt any further approvals to Union Bank regarding the transaction.

The House Committee Chairman, Herman Hembe dispatched a letter to the Director General of SEC last week regarding this matter.

An excerpt of the letter reads, ““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 reorganisation, 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.”

It remains to be seen what the fall out of the commencement of the Rights Issue will be and if SEC will be enabled to approve the end result of the transaction, in light of the House Committee’s probe and instructions.