Nigeria's Special Offences Court in Lagos has heard testimony regarding an alleged fraudulent transaction involving Union Bank Nigeria Plc and the state-owned Assets Management Corporation of Nigeria (AMCON) related to Arik Air (W3, Lagos).

In the ongoing trial, Nigeria's Economic and Financial Crimes Commission (EFCC) is prosecuting AMCON's former managing director, Ahmed Kuru, alongside Union Bank and three others, in connection with fraud involving NGN76 billion naira (USD49.5 million) and USD31.5 million belonging to Arik Air. The other defendants are the airline's former receiver manager, Kamilu Omokide; current CEO Roy Ilegbodu; and a company named Super Bravo Ltd.

According to an EFCC statement, they are facing a six-count charge related to theft, abuse of office, and "stealing by dishonestly taking the property of another."

Count one accuses Union Bank Nigeria Plc of making false statements to AMCON in 2011, intending to induce the unwarranted sale of Arik Air's loans and bank guarantees. This allegedly led to the transfer of a fraudulent sum of NGN71 billion (USD46 million) to AMCON.

Count two involves Kuru, Omokide, and Ilegbodu, accused of fraudulently converting NGN4.9 billion (USD3 million) of Arik Air's property for NG Eagle's use in 2022.

The defendants have pleaded not guilty to all charges and are out on bail of NGN20 million (USD13,000).

Testifying on March 17 as a witness for the prosecution, Union Bank's former assistant manager, Peter Omokaro, said Arik Air had approached the bank for assistance in purchasing an undisclosed aircraft. To facilitate the acquisition, the bank provided guarantees for loans Arik Air had secured from two foreign banks, HSBC Bank and EXIM Bank (United States of America). Union Bank collected an indemnity from Arik Air, and the aircraft was delivered. However, the bank did not disburse any cash for the purchase.

In August 2009, the Central Bank of Nigeria (CBN) took over Union Bank. Following AMCON's guidelines for purchasing non-performing loans and commercial papers, Union's executive management decided to sell the guarantee to AMCON before December 2010. When Union Bank realised the mistake in early 2011, a meeting was held in London with AMCON, Union Bank, HSBC Bank, and EXIM Bank to discuss how to rectify the situation, but Arik Air, the main obligor, was excluded from the meeting.

Omokaro emphasised that Union Bank did not grant a loan to Arik Air, nor did the foreign banks or Union call in the guarantees. He expressed surprise over claims that Union Bank had provided a loan, asserting that no default occurred on Arik Air's part as payments were up to date. He further confirmed that Union Bank converted the guarantee into cash to collect money from AMCON, leading to the fraud allegations.

During cross-examination, Omokaro acknowledged that he had previously sued Union Bank after his appointment was abruptly terminated.

The court admitted five documents related to the transaction as evidence, and the trial was adjourned until March 19.

AMCON eyes recovery of Arik Air debts

Meanwhile, AMCON has reiterated its determination to retrieve NGN455 billion (USD297 million) in accumulated debts from Arik Air - which has been under its receivership since February 2017 - and Arik associated companies Ojemai Investment Limited and Rockson Engineering Nigeria, all linked to the airline's founder Johnson Arumemi-Ikhide.

This Day newspaper reports that AMCON spokesman Jude Nwauzor criticised Arumemi-Ikhide for being uncooperative in settling the debts and for spreading misleading claims, including that Arik Air's loan with Union Bank was performing and that the receivership was premature.

AMCON emphasised that the debts must be recovered legally.

As of December 31, 2024, Arik Air owed AMCON NGN227.6 billion (USD148 million), Rockson Engineering NGN163.5 billion (USD106 million), and Ojemai Investment NGN14 billion (USD9 million).