By Peace Udugba -The daily torch media
What was presented to Nigerians in May 2022 as a landmark acquisition is now facing renewed scrutiny, following allegations about how Titan Trust Bank financed its takeover of Union Bank of Nigeria.
At the time, the deal was framed as a bold move by a relatively new financial institution acquiring one of Nigeria’s oldest banks. However, emerging claims suggest the transaction may have involved a controversial financing structure that is now raising regulatory and ethical concerns.
According to the allegations, Titan Trust Bank secured a $300 million facility from African Export-Import Bank (Afreximbank) to fund the acquisition. While Titan Trust Bank was listed as the borrower, reports claim that assets linked to Union Bank—including shares and treasury instruments—were used as collateral.
Critics argue that such an arrangement, if proven, would imply that the acquired institution effectively backed the loan used to purchase it—an approach that runs counter to established banking regulations.
The controversy deepens with claims that the loan structure may have placed repayment obligations indirectly on Union Bank, potentially exposing depositors’ funds to risk. Analysts warn that if such a framework existed, it could result in the acquiring entity gaining control of the legacy bank with minimal financial exposure.
The deal has also drawn attention to the tenure of former Central Bank Governor Godwin Emefiele, amid allegations that regulatory oversight may have been insufficient. Nigeria’s banking rules generally prohibit the use of borrowed funds to finance bank acquisitions, making the claims particularly sensitive.
By the third quarter of 2025, the financial implications had reportedly intensified, with exchange rate pressures and rising interest costs pushing the exposure beyond ₦500 billion.
Though these figures remain unverified in official disclosures, they have added to concerns within financial and regulatory circles.
An audit—referenced in the allegations—reportedly described the transaction as “unethical financial engineering,” citing potential issues such as misuse of foreign loans, questionable reporting practices, and irregular withdrawals. However, these findings have not been publicly confirmed by regulators.
The situation has also coincided with governance changes. In January 2024, authorities removed the board and management of Union Bank, a move that is now the subject of legal challenges.
Attention has further turned to the ownership structure of Titan Trust Bank, which is reportedly linked to offshore entities and investors, including Rahul Savara and Cornelius Vink.
While none of the parties involved have publicly confirmed the allegations, the unfolding claims have shifted the narrative from a routine acquisition to a broader debate about transparency, regulatory enforcement, and accountability in Nigeria’s banking sector.
As scrutiny grows, a central question persists: if the allegations are substantiated, who ultimately bore the financial burden of the acquisition—and what protections exist for depositors?
