Lagos Fraud Trial Uncovers Arik Air Debt Scandal
At Nigeria’s Special Offences Court in Lagos, a high-profile fraud case is unfolding as key testimony reveals details of an alleged fraudulent transaction involving Union Bank Nigeria Plc and the state-owned Assets Management Corporation of Nigeria (AMCON) connected to Arik Air. The Economic and Financial Crimes Commission (EFCC) is prosecuting former AMCON managing director Ahmed Kuru along with Union Bank and three other defendants, including Arik Air’s former receiver manager Kamilu Omokide, current CEO Roy Ilegbodu, and Super Bravo Ltd. The charges, which encompass theft, abuse of office, and stealing by dishonestly taking the property of another, center on a complex series of events involving NGN76 billion and USD31.5 million linked to the airline.
According to the allegations, Union Bank Nigeria is accused of issuing false statements to AMCON in 2011, thereby inducing the unwarranted sale of Arik Air’s loans and bank guarantees, which allegedly led to a fraudulent transfer of NGN71 billion to AMCON. In addition, Kuru, Omokide, and Ilegbodu face accusations of converting NGN4.9 billion of Arik Air’s property for NG Eagle’s use in 2022. All defendants have pleaded not guilty and have been released on bail set at NGN20 million.
Testimony from former Union Bank assistant manager Peter Omokaro, given on March 17, has become a central piece of evidence in the trial. Omokaro explained that Arik Air had approached the bank to assist in the purchase of an undisclosed aircraft. To facilitate this deal, Union Bank provided guarantees for loans that Arik Air had secured from two foreign financial institutions, HSBC Bank and EXIM Bank in the United States. While the bank collected an indemnity from the airline and the aircraft was delivered, no cash was disbursed for the purchase. This detail has added layers of complexity to the ongoing fraud investigation.
After the Central Bank of Nigeria assumed control of Union Bank in August 2009, the bank’s executive management, following AMCON’s guidelines for purchasing non-performing loans and commercial papers, decided to sell the guarantee to AMCON before December 2010. When the bank recognized the error in early 2011, a meeting was convened in London with representatives from AMCON, Union Bank, HSBC Bank, and EXIM Bank to address the mistake; however, Arik Air, as the main obligor, was notably excluded from these discussions. Omokaro stressed that Union Bank did not extend a loan to Arik Air, nor did the foreign banks or the bank call in the guarantees. He maintained that Arik Air had kept its payments current and expressed surprise at claims suggesting the bank had provided a loan, further asserting that the conversion of the guarantee into cash from AMCON was central to the fraud allegations.
In a parallel development, AMCON has reiterated its determination to recover NGN455 billion in accumulated debts from Arik Air, which has been under receivership since February 2017. Associated companies, including Ojemai Investment Limited and Rockson Engineering Nigeria, are also targeted in the debt recovery efforts. This aggressive pursuit of overdue funds underscores the broader impact of financial mismanagement within Nigeria’s banking and aviation sectors. The case, which remains in the spotlight, is scheduled to resume on March 19 as the court examines further evidence in this intricate fraud investigation.
Related News: https://suspicious-zhukovsky.67-21-117-18.plesk.page/category/air-travel-business/airline-finance/
Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com