ARIK AIR OWED NO DEBT TO UNION BANK, DESCRIBES RECEIVERSHIP AS FRAUDULENT – EFCC WITNESS
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By Aishat Momoh. O.
A prosecution witness in the ongoing trial of former Asset Management Corporation of Nigeria (AMCON) Managing Director, Ahmed Kuru, and others over an alleged N76 billion fraud has described Arik Air’s receivership as fraudulent, insisting that the airline was not indebted to Union Bank of Nigeria Plc.
The witness, Bawa Usman Kaltungo, Director of the Lagos Zonal Directorate 2 of the Economic and Financial Crimes Commission (EFCC), made the assertion while testifying before the Special Offences Court in Ikeja, Lagos.
Kaltungo, the fourth prosecution witness in the case, told Justice Mojisola Dada that his investigation into a petition concerning Arik Air revealed that the purported bad debt used as the basis for appointing a receiver-manager over the airline did not exist.
“The foundation for the appointment of a receivership over Arik Air was fraudulent and faulty. There was no bad debt; it does not exist,” he told the court.
During cross-examination by counsel to the second defendant, Uyi Giwa-Osagie, the witness said he headed the EFCC team that investigated the petition and had informed AMCON’s top management at a meeting that Arik Air was not indebted to Union Bank.
He maintained that the appointment of a receiver-manager to take control of the airline was defective.
Kaltungo, however, also told the court that Kuru, as AMCON’s managing director and chief executive officer, had extensive powers and had unilaterally sanctioned the appointment of a receiver-manager over Arik Air.
In a significant development, the court admitted AMCON board resolutions tendered by Giwa-Osagie to challenge the witness’s assertion that Kuru had acted alone in approving the receivership.
The prosecution objected to the admissibility of the documents, arguing that they were too remote to the issues before the court.
Giwa-Osagie countered that the resolutions were relevant to determining his client’s culpability in the alleged offences.
He argued that Kuru was not standing trial over the general propriety of AMCON’s power to appoint a receiver-manager but over the specific allegations contained in the charge sheet.
The defence counsel maintained that the documents would help establish the circumstances surrounding the decision and challenge the witness’s account of Kuru’s role. He also argued that the resolutions were public records that could be tendered from the Bar.
In her ruling, Justice Dada admitted the documents, holding that they emanated from AMCON’s board as a corporate body and had been duly certified in accordance with Section 104 of the Evidence Act.
The admission gives the defence documentary evidence with which to challenge the prosecution’s claim that Kuru unilaterally approved the receivership.
However, the court’s decision to admit the resolutions does not determine the legality of the receivership or resolve the allegations against the defendants.
The EFCC instituted the case following a petition by human rights lawyer, Femi Falana, SAN, on behalf of Arik Air’s promoters and shareholders over the airline’s receivership and related transactions.
The defendants are Kuru; Kamilu Alaba Omokide, a former receiver-manager of Arik Air; Captain Roy Ilegbodu, the airline’s chief executive officer; Union Bank of Nigeria Plc; and Super Bravo Limited.
They are facing a six-count charge bordering on conspiracy, stealing and abuse of office. All the defendants pleaded not guilty when they were arraigned on January 20, 2025.
The prosecution’s case includes allegations concerning the handling of Arik Air’s loan obligations, the transfer of its debt exposure to AMCON and the alleged conversion of N4.9 billion belonging to the airline for the benefit of NG Eagle Limited.
One of the counts alleges that Union Bank, sometime in 2011, made false statements to AMCON concerning Arik Air’s performing loans and bank guarantees, resulting in the transfer of an allegedly bogus N71 billion debt to the corporation.
Another count accuses Kuru, Omokide and Ilegbodu of fraudulently converting N4.9 billion belonging to Arik Air to the use of NG Eagle Limited in 2022.
The case also raises questions about the exercise of AMCON’s statutory powers and the responsibilities of a receiver-manager appointed to take control of a distressed company.
Section 553(2) of the Companies and Allied Matters Act 2020 requires a receiver-manager to act in the company’s best interests, including preserving its assets and furthering its business objectives.
Whether the circumstances surrounding Arik Air’s receivership involved any breach of statutory obligations or criminal conduct remains for the court to determine.
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