An Economic and Financial Crimes Commission (EFCC) director has told a Lagos court that Arik Air had no bad debt owed to Union Bank of Nigeria Plc, describing the foundation for the airline’s receivership as fraudulent and defective.
The witness, Bawa Usman Kaltungo, Director of the EFCC’s Lagos Zonal Directorate 2, made the assertion while testifying as the fourth prosecution witness in the ongoing trial of former Asset Management Corporation of Nigeria (AMCON) Managing Director, Ahmed Kuru, and four others over alleged fraud involving N76bn and $31.5m.
Kaltungo, who led the EFCC team that investigated a petition concerning Arik Air, testified before Justice Mojisola Dada of the Lagos State Special Offences Court, Ikeja.
During cross-examination by counsel to the second defendant, Uyi Giwa-Osagie, the witness said investigations showed that the purported bad debt used to justify the appointment of a receiver-manager over the airline did not exist.
“The foundation for the appointment of a receivership over Arik Air was fraudulent and faulty. There was no bad debt; it does not exist,” Kaltungo told the court.
He further claimed that he had informed AMCON’s top management at a meeting that Arik Air was not indebted to Union Bank and that the appointment of the receiver-manager was defective.
However, the EFCC director maintained that Kuru, as AMCON’s managing director and chief executive, wielded extensive powers and had unilaterally authorised the appointment.
The assertion prompted Giwa-Osagie to tender AMCON board resolutions intended to challenge the prosecution witness’s account of Kuru’s role in the decision.
The defence lawyer argued that the documents were relevant to establishing the circumstances surrounding the receivership and determining his client’s alleged involvement in the transactions under investigation.
He maintained that Kuru was not being tried over the general propriety of AMCON’s powers to appoint a receiver-manager but over the specific allegations contained in the charge.
The prosecution opposed the admission of the resolutions, arguing that they were too remote from the issues before the court. The defence countered that the documents were certified public records emanating from AMCON’s board.
Ruling on the matter, Justice Dada admitted the resolutions, holding that they were corporate records duly certified in accordance with Section 104 of the Evidence Act.
The ruling gives the defence documentary evidence with which to challenge the prosecution’s account of how the receivership was authorised. However, the admission of the documents does not amount to a determination of the legality of the receivership or the guilt or innocence of any defendant.
The case followed a petition by human rights lawyer Femi Falana, SAN, on behalf of Arik Air’s promoters and shareholders over the airline’s receivership and related transactions.
The defendants are Kuru; Kamilu Alaba Omokide, a former receiver-manager of Arik Air; Captain Roy Ilegbodu, the airline’s chief executive officer; Union Bank of Nigeria Plc; and Super Bravo Limited.
They are facing a six-count charge bordering on conspiracy, theft and abuse of office. All five defendants pleaded not guilty when they were arraigned on January 20, 2025.
One of the allegations is that Union Bank made false statements to AMCON in 2011 concerning Arik Air’s performing loans and bank guarantees, leading to the transfer of an allegedly bogus N71bn debt exposure to the corporation.
Another count accuses Kuru, Omokide and Ilegbodu of fraudulently converting N4.9bn belonging to Arik Air for the use of NG Eagle Limited in 2022.
The prosecution is also examining the circumstances surrounding the airline’s loan obligations, the transfer of its alleged debt exposure to AMCON and transactions involving its assets.
The proceedings have brought renewed scrutiny to the exercise of AMCON’s powers over distressed businesses and the responsibilities of receiver-managers appointed to take control of companies.
Section 553(2) of the Companies and Allied Matters Act 2020 sets out obligations governing a receiver-manager’s conduct, including duties relating to the company’s interests and the preservation of its assets.
The allegations remain before the court, and the defendants are presumed innocent unless proven guilty.
