EFCC Witness Tells Lagos Court Arik Air Not Indebted to Union Bank, Labels Receivership Fraudulent
The Director of the Lagos Zonal Directorate 2 of the Economic and Financial Crimes Commission (EFCC), Bawa Usman Kaltungo, has told the Lagos State Special Offences Court in Ikeja that Arik Air was not indebted to Union Bank of Nigeria Plc, describing the basis for the airline’s receivership as fraudulent and defective.
Kaltungo, the fourth prosecution witness in the ongoing trial of former Asset Management Corporation of Nigeria (AMCON) Managing Director Ahmed Kuru and others over an alleged ₦76 billion and $31.5 million fraud, gave the testimony before Justice Mojisola Dada.
According to the witness, his investigation found no outstanding bad debt that could justify appointing a receiver-manager to take control of Arik Air.
“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 explained that he led the EFCC team responsible for investigating a petition concerning the airline. During a meeting with AMCON’s top management, he said he informed the officials that Arik Air was not indebted to Union Bank and that the appointment of a receiver-manager was fundamentally defective.
The testimony comes amid allegations surrounding Arik Air’s loan obligations, the transfer of its purported debt exposure to AMCON, the airline’s takeover and transactions involving its assets.
During cross-examination by Kuru’s lawyer, Uyi Giwa-Osagie, Kaltungo maintained that his client, as AMCON’s Managing Director and Chief Executive Officer at the time, wielded extensive powers and had unilaterally approved the appointment of the receiver-manager.
The defence disputed this assertion, presenting AMCON board resolutions to demonstrate that the decision to place Arik Air under receivership was made at the corporate level rather than solely by Kuru.
The prosecution objected to the admission of the documents, arguing that they were too remote from the issues being considered by the court.
However, Giwa-Osagie insisted that the resolutions were relevant to determining his client’s culpability. He argued that Kuru was not being prosecuted over AMCON’s general statutory authority to appoint a receiver-manager but over the specific allegations contained in the charge.
The defence maintained that the documents would help establish the circumstances surrounding the receivership decision and challenge the witness’s claim that Kuru acted alone. It also argued that the resolutions were public records that could properly be tendered from the Bar.
In her ruling, Justice Dada admitted the AMCON board resolutions as evidence, holding that the documents emanated from the corporation’s board and had been duly certified in accordance with Section 104 of the Evidence Act.
The ruling allows the defence to rely on the resolutions in challenging Kaltungo’s testimony about Kuru’s alleged unilateral approval of the receivership.
However, the admission of the documents does not amount to a finding that the receivership was lawful or that the prosecution’s allegations have been disproved.
The EFCC filed the case following a petition by human rights lawyer Femi Falana, SAN, on behalf of Arik Air’s promoters and shareholders concerning the airline’s receivership and related transactions.
Those standing trial 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 face a six-count charge bordering on alleged conspiracy, stealing and abuse of office. All the allegations remain subject to determination by the court.
The prosecution’s case includes allegations relating to the handling of Arik Air’s loan obligations, the transfer of its purported debt exposure to AMCON and the alleged conversion of ₦4.9 billion belonging to the airline for the benefit of NG Eagle Limited.
One of the charges alleges that Union Bank made false representations to AMCON in 2011 concerning Arik Air’s performing loans and bank guarantees, leading to the purported transfer of a ₦71 billion
