No Evidence That Union Bank Disbursed N71bn To Arik Air – EFCC

The acting director of the Economic and Financial Crimes Commission (EFCC), Kaduna Zonal Office, Bawa Kaltungo, on Friday told a Federal High Court in Lagos that there is no evidence that Union Bank disbursed a loan of N71 billion to Arik Air.

Kaltungo, who was testifying in the ongoing trial of former managing director of Assets Management Corporation of Nigeria, Ahmed Kuru, and four others, on allegations of defrauding Arik Air of N76 billion and $31.5 million, also claimed that the bank was only acting as a guarantor for foreign loans.

The EFCC had arraigned Kuru, a former Receiver Manager of Arik Airline Ltd., Kamilu Omokide, the airline’s Chief Executive Officer, Captain Roy Ilegbodu, Union Bank Limited, and Super Bravo Ltd. before the court on a six-count charge of conspiracy, stealing, and abuse of office.

The defendants, however, pleaded not guilty to the charge.

Kaltungo also informed the trial judge, Justice Mojisola Dada, that Arik Air Ltd was allegedly turned into a “cash cow” by Receivers appointed by AMCON, resulting in financial losses estimated at over N350 billion.

The anti-graft agency operative further stated that investigations had revealed that performing loans were transferred to AMCON without justification, thereby exacerbating the airline’s financial crisis.

The witness testified that despite requests, the bank did not provide proof of non-performing loans but claimed to have sold a N71 billion loan to AMCON, which investigators found to be fictitious.

He explained to the court that Arik Air had secured multiple international loans backed by Union Bank, and some of these loans, which were initially performing, were later converted into local loans without consultation, thereby worsening the airline’s finances.

Kaltungo also alleged that the appointment of receiver/managers marked the start of Arik Air’s decline.

He said, “The receivership failed to restore the airline; instead, it led to mismanagement and financial loss,” he said. During receivership, 24 aircraft engines belonging to Arik Air were abandoned abroad.

Investigators uncovered extensive misconduct, including contracts awarded without services rendered, and billions paid under questionable lease agreements to companies like Olympus Airways, Clobek Nigeria Ltd, and Eznis Airways LLC, some foreign or unlicensed.

“Two aircraft worth $78 million were dismantled and sold without owner or regulator approval,” the witness claimed.

Kaltungo further stated that statutory filings, such as annual returns, had not been submitted to the CAC, and that inspections had revealed vandalised and cannibalised aircraft, missing engines, parts, and consumables.

Justice Dada has adjourned the trial to December 2 for the continuation of the trial.