By Ben Agande

Abuja – House of Representatives has directed the Securities and Exchange Commission, SEC, to withhold further approvals to Union Bank of Nigeria, UBN, on its rights issue as well as its recapitalisation until the bank was able to provide satisfactory answers to issues raised in a petition before it.

Chairman of the House Committee on Capital Market and Institutions, Mr. Herman Hembe, in a letter to the Director-General of SEC, noted that the stoppage of further approval was to safeguard the interests of shareholders and to ensure that due process is followed in the exercise.

The letter, with reference number NASS/7HR/CT.16/06/057 and entitled Interactive Meeting in Respect of Union Bank of Nigeria Plc Recapitalisation, read in part: “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 Bank’s compliance with rules, procedure and statutes guiding rights issues placing and capital reorganisation, we request that the Securities and Exchange Commission, 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,” she added.

Hembe explained, Tuesday, that the decision of the committee was “part of the process that we have started to look into merger of banks. We asked them pertinent questions on the recapitalisation process, particularly as regards the right issue that Union Bank undertook and we found out that they were not prepared to give us the necessary answers.

“We are asking these questions particularly about the Union Bank because of petitions to this House by some Nigerians over the whole process. We were told that shareholders were not carried along in the process of the rights issue.

“We were told that approvals from the SEC were obtained without request from the share-holders of Union Bank.”