At the continuation of the ongoing case between Arik Air and the Asset Management Corporation of Nigeria, AMCON, a former Executive Director, Mr. Abbas Muhammed Jega, has disclosed that the airline’s debt fell under the category of non-performing loans.
The charge against Kuru, Arik Air, others
The other defendants being prosecuted by the Economic and Financial Crimes Commission, EFCC, on a six-count charge bordering on conspiracy, stealing, and abuse of office are; Mr. Kamilu Omokide, a former receiver manager of Arik Air Limited; Captain Roy Ilegbodu, Arik Air Chief Executive Officer; Union Bank Limited; and Super Bravo Limited.
Jega continued his evidence on Monday as the third prosecution witness in the ongoing trial of the former AMCON Managing Director and four others, who are standing trial over alleged financial misappropriation amounting to ₦76 billion and $31.5 million before Justice Mojisola Dada of the Special Offences Court, Ikeja.
Union Bank Limited is separately charged with one count of making false statements to a public officer.
Prior to Monday’s proceeding, Jega, had testified that the Arik loan acquired by AMCON during the first phase of the Eligible Bank Asset, EBA, programme was performing.
At the resumed hearing, Jega told the court that the airline’s debt to AMCON was later classified as non-performing by relevant regulatory agencies.
The prosecution witness made this statement under cross-examination by the first Defence Counsel, Professor Taiwo Osipitan, SAN.
Jega recanted his earlier testimony in which he had stated that AMCON leadership, of which he was a part, purchased Arik’s N85 billion debt from Union Bank and Bank PHB.
‘Arik Air was unable to …’
The witness also stated before the court that AMCON extended an additional N11 billion loan to Arik as working capital.
According to the witness, inspite of the funds injected by AMCON, along with intervention funds from the Bank of Industry, BOI, which AMCON also guaranteed, Arik was unable to meet its repayment obligations up until the time he left the corporation.
Jega said, “Although I served as executive director of credits and carried out all my actions with the board’s approval, I never saw the loan purchase agreement detailing the number and credit specifics of the Arik loan, particularly from Union Bank.
“According to Union Bank, all the loans were performing. However, by the time I left AMCON in 2015, the Arik loan had become non-performing.
“Arik had been servicing the loan at Union Bank, and the bank reported no defaults.
“There were minutes from a meeting held in London, which I saw, but those minutes were written by Union Bank and sent to AMCON.”
The prosecution witness said Union Bank had misled AMCON, and that it was only after the London meeting between the obligor and AMCON management that issues with the loan purchase became apparent.
He was however unable to explain why he failed to escalate the matter to both the AMCON board and the Central Bank of Nigeria.
The witness also admitted that, aside from the guarantees, Arik Air and its promoter had other outstanding loans with AMCON.
Under cross-examination by Mr. Olasupo Shasore, SAN, counsel to Kuru, Jega confirmed that the chairman of Arik once approached him to take up a consultancy role with the airline, but the arrangement did not materialise.
“Arik was already experiencing issues when I was offered the consultancy role, but I was advised to decline it.
“My relationship with all my clients was strictly professional,” he said.
Justice Dada adjourned the case until July 1, 2025 for continuation of trial.
