Arik had repaid 38% of loan before AMCON takeover — EFCC witness

By: Amarachi Okonkwo 

A prosecution witness has told a Lagos Special Offences Court that Arik Air had already repaid 38 per cent of its foreign loan obligations before its eventual takeover by the Asset Management Corporation of Nigeria, raising fresh questions over the classification of the airline’s debt as non-performing.

The disclosure was made on Tuesday by Bawa Kaltungo, an investigator with the Economic and Financial Crimes Commission, while testifying before Justice Mojisola Dada at the Special Offences Court sitting in Ikeja, Lagos.

The trial centres on alleged financial improprieties involving former AMCON Managing Director Ahmed Kuru and co-defendants, including Kamilu Alaba Omokide, Captain Roy Ilegbodu, Union Bank of Nigeria, and Super Bravo Limited. They are facing a six-count charge bordering on conspiracy, stealing, and abuse of office.

Led in evidence by prosecution counsel Wahab Shittu, Kaltungo told the court that documentary records obtained during the EFCC’s investigation indicated that Arik Air was meeting its foreign loan obligations prior to AMCON’s intervention.

He referenced a letter dated October 4, 2010, issued by Union Bank to Arik Air’s management regarding a maturing quarterly repayment tied to an Airbus aircraft financing facility. According to the witness, the correspondence confirmed that the airline remained compliant with its repayment schedule, with payments recorded as recently as December 2010.

“This letter shows that the foreign loan was performing optimally at the time,” Kaltungo told the court.

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Kaltungo alleged that despite the loan’s performing status, Union Bank converted a N51bn guarantee linked to the facility into a loan and subsequently transferred it to AMCON as a non-performing asset.

He further claimed that the bank, which acted as guarantor to the foreign facility involving creditors such as HSBC, failed to remit funds meant for loan servicing after the conversion.

According to him, Arik Air had already repaid 38 per cent of the foreign loan to international lenders before the disputed transaction.

“Union Bank withheld the N51 billion which ought to have been used to settle the foreign creditors,” Kaltungo said, adding that the bank remained indebted to the airline to the extent of the repaid portion.

The EFCC investigator also maintained that Union Bank did not directly originate the loan facility, noting that the financing was provided by foreign institutions and serviced by Arik Air up until mid-2010.

Providing insight into the period following AMCON’s takeover of Arik Air in March 2016, Kaltungo told the court that only about N2bn in loan servicing payments could be traced.

He further alleged discrepancies in proceeds from asset disposals, stating that three aircraft were revalued and sold for approximately $105.7m (about N32bn), but that only N9.2bn was applied toward loan servicing.

This, he said, left over N28bn unaccounted for.

“The exact figures are contained in my investigation report before the court,” he added.

Under cross-examination by defence counsel Taiwo Osinpitan, Kaltungo acknowledged that investigators did not trace any funds directly to the personal accounts of the accused persons.

He also noted that several documents tendered in court were intended to demonstrate that the investigation was conducted professionally and without bias.

According to the EFCC, one of the charges alleges that Union Bank made false representations in 2011 regarding Arik Air’s loan status, leading to the transfer of N71bn to AMCON.

Another count accuses Kuru and others of fraudulently converting N4.9bn belonging to Arik Air for the benefit of NG Eagle Limited.

Justice Dada subsequently adjourned the matter until May 18, 2026, for the continuation of cross-examination.

The case underscores ongoing scrutiny of AMCON’s asset acquisition practices and the banking sector’s handling of distressed loans, particularly in capital-intensive industries such as aviation. 

Analysts note that the outcome could have implications for creditor rights, loan restructuring frameworks, and investor confidence in Nigeria’s financial system