EFCC witness disputes Union Bank debt claim in Arik Air receivership trial

An investigator with the Economic and Financial Crimes Commission (EFCC), Bawa Kaltungo, has described Arik Air receivership as fraudulent, telling the Lagos State Special Offences Court in Ikeja that the airline was not indebted to Union Bank of Nigeria.

Mr Kaltungo, who is the Director of the EFCC Zonal Directorate 2 in Lagos, was the fourth prosecution witness in the trial of former Asset Management Corporation of Nigeria (AMCON) Managing Director Ahmed Kuru and four others, said he had informed AMCON’s management that Arik Air did not owe 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 said he led the EFCC team that investigated a petition over the receivership. He maintained that Mr Kuru had extensive powers and unilaterally approved the appointment of the receiver-manager.

The defence challenged this claim by tendering AMCON board resolutions relating to the appointment.

The prosecution objected to their relevance, arguing that the documents were too remote from the issues before the court. But Mr Kuru’s lawyer, Uyi Giwa-Osagie, argued that the resolutions were relevant to determining his client’s role in the decision.

Mr Giwa-Osagie said Mr Kuru was not standing trial over AMCON’s general power to appoint a receiver-manager, but over the specific allegations. He argued that the board resolutions would help establish the circumstances surrounding the appointment.

Trial judge Mojisola Dada admitted the documents, ruling that they emanated from AMCON’s board and were certified in accordance with Section 104 of the Evidence Act.

The ruling allowed the documents to be admitted as evidence but did not determine whether the receivership was lawful or whether Mr Kuru acted without the board’s authorisation.

Mr Kuru is standing trial alongside former receiver-manager Kamilu Alaba Omokide, Arik Air Chief Executive Officer Roy Ilegbodu, Union Bank of Nigeria Plc and Super Bravo Limited. They face a six charges of conspiracy, stealing and abuse of office. All five defendants pleaded not guilty.

During an earlier sitting on 28 April, Mr Kaltungo told the court that Arik Air had paid 38 per cent of its foreign loan before AMCON took over the airline, according to an EFCC report of the proceedings.

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

Mr Kaltungo said Arik Air obtained the loan from foreign lenders, including HSBC, and had serviced it until June 2010.

He argued that the document showed the facility was performing, contrary to the claim that it was a non-performing loan.

According to the witness, Union Bank converted a N51 billion guarantee into a loan and transferred the claim to AMCON without using the funds to pay the foreign creditors.

“Arik has paid 38 per cent of its loan to foreign creditors,” he said.

He alleged that the bank withheld the money meant for the creditors and still owed Arik Air in respect of the amount the airline had repaid.

Mr Kaltungo also told the court that investigators found more than N2 billion in payments in the bank records after the receivership took effect on 8 March 2016.

On the proceeds from the sale of Arik Air shares, he noted that three aircraft had been revalued at $105.718 million, equivalent to about N32 billion.

He further explained that only N9.2 billion was applied to the airline’s loan, leaving more than N28 billion unaccounted for.

During cross-examination in April, Mr Kaltungo said investigators did not trace money to the accounts of Mr Kuru and Mr Ilegbodu.

These claims have yet to be determined by the court.

The EFCC arraigned the defendants in January 2025 following a petition by Arik Air promoters and shareholders, represented by Femi Falana, a Senior Advocate of Nigeria (SAN), over the airline’s receivership and related transactions.

One count accuses Union Bank of making false statements to AMCON about Arik Air’s performing loans, leading to the transfer of what the prosecution describes as a bogus N71 billion debt.

Another accuses Messrs Kuru, Omokide and Ilegbodu of fraudulently converting N4.9 billion belonging to Arik Air for the use of NG Eagle Limited in 2022.

The charge also alleges that the defendants authorised the dismantling and destruction of an Arik Air aircraft, registration number 5N-JEA and serial number 15058, valued at $31.5 million, in February 2022.

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