EFCC investigator says Arik Air is not in debt to Union Bank

An investigator from the Economic and Financial Crimes Commission (EFCC), Bawa Kaltungo, has called the Arik Air receivership a scam. He told the Lagos State Special Offences Court in Ikeja that the airline does not owe Union Bank of Nigeria any money.

Mr Kaltungo, who is the Director of the EFCC Zonal Directorate 2 in Lagos, was the fourth witness for the prosecution in the trial of Ahmed Kuru, the former Managing Director of the Asset Management Corporation of Nigeria (AMCON), and four others. He stated that he had informed AMCON's management that Arik Air had no debt to the bank.

"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 said on Monday.

The witness mentioned that he led the EFCC team that looked into a petition about the receivership. He insisted that Mr Kuru had wide-ranging powers and made the decision to appoint the receiver-manager on his own.

The defence challenged this claim by presenting AMCON board resolutions related to the appointment. The prosecution argued that these documents were not relevant, saying they were too far from the issues at hand. But Mr Kuru's lawyer, Uyi Giwa-Osagie, claimed the resolutions were important to prove his client's role in the decision.

Mr Giwa-Osagie explained that Mr Kuru was not on trial for AMCON's general power to appoint a receiver-manager, but for specific claims. He argued that the board resolutions would help clarify the situation surrounding the appointment.

Trial judge Mojisola Dada accepted the documents, stating they came from AMCON's board and were certified according to Section 104 of the Evidence Act. The ruling allowed the documents to be used as evidence but did not decide if the receivership was legal or if Mr Kuru acted without the board's permission.

Mr Kuru is on trial with former receiver-manager Kamilu Alaba Omokide, Arik Air CEO Roy Ilegbodu, Union Bank of Nigeria Plc, and Super Bravo Limited. They face six charges, including conspiracy, stealing, and abuse of office. All five defendants have pleaded not guilty.

In an earlier session on April 28, Mr Kaltungo told the court that Arik Air had paid 38 percent of its foreign loan before AMCON took control of the airline, according to an EFCC report.

He mentioned a letter dated October 4, 2010, from Union Bank to Arik Air about quarterly repayments on an Airbus aircraft loan. The letter, found during the investigation, showed that the airline was expected to make a repayment on the facility.

Mr Kaltungo said Arik Air got the loan from foreign lenders, including HSBC, and had been paying it off until June 2010. He argued that this document showed the loan was performing, which goes against the claim that it was a non-performing loan.

The witness claimed that Union Bank turned a N51 billion guarantee into a loan and handed the claim to AMCON without using the money to pay the foreign creditors. "Arik has paid 38 percent of its loan to foreign creditors," he said.

He alleged that the bank held back money meant for the creditors and still owed Arik Air for the amount the airline had paid back. Mr Kaltungo also told the court that investigators found over N2 billion in payments in the bank records after the receivership started on March 8, 2016.

He noted that three aircraft had been revalued at $105.718 million, which is about N32 billion. He further explained that only N9.2 billion was used to pay the airline's loan, leaving over N28 billion unaccounted for.

During cross-examination in April, Mr Kaltungo said investigators did not find any money linked to Mr Kuru or Mr Ilegbodu's accounts. These claims are yet to be settled by the court.

The EFCC charged the defendants in January 2025 after a petition from Arik Air promoters and shareholders, represented by Femi Falana, a Senior Advocate of Nigeria (SAN), concerning the airline's receivership and related matters.

One charge claims that Union Bank made false statements to AMCON about Arik Air's performing loans, leading to the transfer of what the prosecution calls a fake N71 billion debt. Another charge accuses Messrs Kuru, Omokide, and Ilegbodu of illegally converting N4.9 billion belonging to Arik Air for the use of NG Eagle Limited in 2022.

The charge also claims that the defendants approved the dismantling and destruction of an Arik Air aircraft, registration number 5N-JEA, valued at $31.5 million, in February 2022. The defendants deny all the allegations.