Alleged N76bn, $31.5m Fraud: Arik Air Paid 38% of Foreign Loan to Creditors Before AMCON Takeover – Witness

The fourth prosecution witness (PW4), Bawa Usman Kaltungo, in the trial of former Managing Director of the Asset Management Corporation of Nigeria (AMCON), Ahmed Kuru, and others over an alleged N76bn ($31.5m) fraud, told Justice Mojisola Dada of the Special Offences Court sitting in Ikeja, Lagos, that Arik Air Nigeria Limited had paid 38 percent of its foreign loan to creditors before it was taken over by AMCON.

Kuru, alongside Kamilu Alaba Omokide, Captain Roy Ilegbodu, Union Bank of Nigeria Plc, and Super Bravo Limited, are being prosecuted by the Economic and Financial Crimes Commission, EFCC on a six-count charge bordering on conspiracy, stealing, and abuse of office.

One of the counts reads:
“That you, Union Bank of Nigeria Plc, sometime in 2011 or thereabouts, in Lagos, within the jurisdiction of this Honourable Court, with the intention of causing and/or inducing the unwarranted sale of Arik Air loans and bank guarantees with Union Bank, made false statements to the Asset Management Corporation of Nigeria (AMCON) regarding Arik Air Limited’s performing loans, following which you transferred a bogus figure of N71,000,000,000.00 (Seventy-One Billion Naira) to AMCON.”

Another count reads:
“That you, Ahmed Lawal Kuru, Kamilu Alaba Omokide (as Receiver-Manager of Arik Air Limited), and Captain Roy Ilegbodu (Chief Executive Officer of Arik Air Limited in Receivership), sometime in 2022 or thereabouts, in Lagos, within the jurisdiction of this Honourable Court, fraudulently converted to the use of NG Eagle Limited the total sum of N4,900,000,000.00 (Four Billion, Nine Hundred Million Naira only), property of Arik Air Limited.”

At the resumed sitting on Tuesday, April 28, 2026, Kaltungo, an EFCC investigator and currently the Acting Zonal Director of the Lagos Zonal Directorate 2, Ikoyi, continued his examination-in-chief led by prosecution counsel Wahab Shittu, SAN.

When asked to speak on Exhibit P52, the witness said it was a letter recovered during the investigation from Union Bank to the Executive Chairman of Arik Air Limited, dated October 4, 2010, and addressed to the then Managing Director of Arik Air.

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“The letter is titled ‘Advice on Maturing Quarterly Repayment Obligations Second Airbus A240/500/MRM 912.”

He stated that the repayment for the loan obtained by Arik from foreign lenders was quarterly.

According to him: “When the loan was near its due date, they sent a letter as a reminder. This was for the last quarter. This letter is evidence showing the last quarter of 2010-an advice was issued for repayment.

Investigation revealed that payment was made in December of the same year. However, Union Bank illegally converted the guarantee into a loan and sold it to AMCON, claiming it was a non-performing loan. This letter shows that the foreign loan was performing optimally.”

The witness said that at the time AMCON took over Arik, Union Bank had converted the airline’s N51bn guarantee, sold it, but failed to pay the foreign creditors.

Investigation revealed that Union Bank, as the guarantor of the loan, withheld Arik’s N51bn and abandoned its obligation to the foreign creditors.

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“Arik has paid 38 percent of its loan to foreign creditors.

“However, when Union Bank converted the Arik guarantee of N51bn, it did not pay the foreign creditors from the funds.

“Union Bank withheld the N51bn. With this amount, Union Bank was supposed to pay the foreign creditors.

“Our investigation revealed that Union Bank still owes Arik 38 percent of the paid loan,” he added.

Kaltungo also told the court that Union Bank did not provide any loan to Arik, noting that the facility was foreign credit obtained from institutions including HSBC, which the airline serviced until June 2010.

The witness further told the court that a letter recovered during the investigation and addressed to the former Chairman of Arik Air Limited, Johnson Arumemi-Ikhide, showed that the loan was performing.

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When asked how much was paid to service the foreign loan throughout the period of takeover, he replied that receivership took effect from March 8, 2016.

“However, the only payment seen in the bank was over N2bn. This was realized from the sale of Arik shares.

“Arik shares were revalued for three aircraft at $105,718,000, which is about N32bn.

“Investigation revealed that only N9.2bn was applied to the Arik loan, while the balance of over N28bn was unaccounted for.

“The exact figures are captured in my investigation report before the court.”

Under cross-examination by Prof. Taiwo Osinpitan, SAN, counsel to the first and third defendants, the witness said no money was traced to the accounts of the first and third defendants during the investigation.

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When asked why the document admitted as P51 was tendered, he said it was to prove that investigation was conducted professionally without any bias.

The case was adjourned to May 18, 2026, for continuation of cross-examination.