EFCC Witness Insists N4.9bn Arik Air Funds Were Diverted to NG Eagle, Admits No Money Traced to Ex-AMCON Boss

•Maintains $31.5m aircraft teardown was unlawful

Wale Igbintade

The Director of the Lagos Zonal Directorate 2 of the Economic and Financial Crimes Commission (EFCC), Bawa Usman Kaltungo, has maintained that approximately N4.9 billion realised from the sale of Arik Air’s assets was diverted and used to establish NG Eagle, rather than being applied toward the settlement of the airline’s outstanding debts.

Kaltungo made the assertion while continuing his testimony under cross-examination before the Special Offences Court in Ikeja, Lagos, in the ongoing trial of former Managing Director of the Asset Management Corporation of Nigeria (AMCON), Ahmed Kuru, and four other defendants on charges bordering on conspiracy, stealing and abuse of office.

Kuru is being tried alongside Kamilu Alaba Omokide, a former Receiver-Manager of Arik Air; Capt. Roy Ilegbodu, former Chief Executive Officer of Arik Air under receivership; Union Bank of Nigeria Plc; and Super Bravo Limited.

Under cross-examination by Prof. Taiwo Osipitan (SAN), counsel to Kuru and Ilegbodu, the EFCC witness maintained that financial records obtained from Arik Air’s Chief Financial Officer and findings from the commission’s investigation showed that the N4.9 billion was not utilised to liquidate the airline’s liabilities.

According to him, the funds were instead channelled towards the establishment of NG Eagle, an airline that emerged during Arik Air’s receivership.

A substantial part of the proceedings focused on the legal status of Arik Air and its assets following AMCON’s appointment of a receiver-manager.

Asked whether Arik Air was a private or public company, Kaltungo stated that it was a private company before it was placed under receivership and noted that the petition that led to the EFCC investigation was submitted by the airline’s shareholders.

He maintained that although management and control of the airline were transferred to the receiver-manager, ownership remained vested in the shareholders.

“Even under receivership, Arik Air still belongs to the shareholders,” the witness told the court.

Kaltungo explained that a receiver-manager is empowered by law to take possession of a company’s assets, preserve and protect them, collect rents and profits, realise securities on behalf of creditors and manage the company’s affairs pending recovery of secured obligations.

According to him, a receiver-manager enjoys broader powers than an ordinary receiver because such an appointee can continue operating the business while managing its assets.

The cross-examination also examined allegations surrounding the dismantling of a Boeing aircraft, identified as 5N-JEA, Serial Number 15058, valued at approximately $31.5 million.

The prosecution alleged that Kuru, Omokide and Ilegbodu abused their offices by authorising the teardown of the aircraft in a manner prejudicial to the economic interests of Arik Air and Nigeria.

However, when questioned by defence counsel, Kaltungo admitted that EFCC investigators did not trace any proceeds from the dismantling of the aircraft to the personal accounts of either Kuru or Ilegbodu.

“I have said it before that no money was traced to their personal accounts,” he told the court.

Despite the concession, the witness maintained that the dismantling was unlawful.

“The teardown was illegal irrespective of whether any proceeds were traced to the defendants personally,” Kaltungo insisted.

The witness was subsequently confronted with documents allegedly indicating that JEM Leasing Limited, said to be the aircraft’s original owner, had authorised the dismantling.

Kaltungo, however, questioned the authenticity of the document, arguing that the letter relied upon by the defence was not written on the company’s official letterhead.

The witness was also referred to court decisions relating to Arik Air’s receivership.

During the proceedings, reference was made to an earlier Federal High Court judgment declaring the receivership unlawful, as well as subsequent appellate proceedings that reportedly set aside that decision.

Nevertheless, Kaltungo maintained that the receivership did not alter Arik Air’s ownership structure and that the airline remained a separate legal entity throughout the period.

The trial arose from allegations that Union Bank misrepresented the status of Arik Air’s loan obligations when transferring them to AMCON.

According to the first count, Union Bank allegedly made false representations to AMCON concerning Arik Air’s loan portfolio, resulting in the transfer of what the prosecution described as a fictitious debt figure of N71 billion.

Another count alleged that Kuru, Omokide and Ilegbodu fraudulently diverted N4.9 billion belonging to Arik Air for the benefit of NG Eagle Limited in 2022.

All the defendants have pleaded not guilty to the charges.

Justice Mojisola Dada subsequently adjourned the matter till July 7 for continuation of the cross-examination of the EFCC witness by counsel to the second defendant.