The Director of the Lagos Zonal Directorate 2 of the Economic and Financial Crimes Commission, 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 and that the basis for placing the airline under receivership was fraudulent.
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Kaltungo, the fourth prosecution witness in the ongoing trial of former Managing Director of the Asset Management Corporation of Nigeria, Ahmed Kuru, and others over an alleged ₦76 billion and $31.5 million fraud, testified before Justice Mojisola Dada that his investigation found no bad debt capable of supporting the appointment of a receiver-manager over 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,” he told the court.
The witness said he led the EFCC team that investigated a petition concerning the airline and informed AMCON’s top management during a meeting that Arik Air was not indebted to Union Bank and that the appointment of a receiver-manager to take control of the airline was defective.
His testimony came amid allegations concerning Arik Air’s loan obligations, the transfer of its debt exposure to AMCON, the airline’s eventual takeover and transactions involving its assets.
During cross-examination by Kuru’s counsel, Uyi Giwa-Osagie, Kaltungo maintained that Kuru, as AMCON’s Managing Director and Chief Executive Officer, possessed extensive powers and had unilaterally sanctioned the appointment of the receiver-manager.
The defence, however, challenged that account by tendering AMCON board resolutions to show that the decision to place Arik Air under receivership was taken at the corporate level and was not solely the decision of Kuru.
The prosecution objected to the documents, arguing that they were too remote from the issues before the court.
Giwa-Osagie countered that the documents were relevant to determining his client’s culpability, arguing that Kuru was not standing trial over AMCON’s general statutory power to appoint a receiver-manager but over the specific allegations contained in the charge.
He maintained that the board resolutions were necessary to establish the circumstances surrounding the receivership decision and to challenge the prosecution witness’s claim that Kuru acted unilaterally.
The defence further argued that the documents were public records and could properly be tendered from the Bar.
In her ruling, Justice Dada admitted the AMCON board resolutions in evidence, holding that they emanated from the corporation’s board as a corporate body and were duly certified in accordance with Section 104 of the Evidence Act.
The admission of the documents gives the defence an opportunity to rely on documentary evidence in challenging Kaltungo’s assertion that Kuru alone approved the receivership.
The court’s decision to admit the resolutions does not, however, amount to a determination that the receivership was lawful or that the prosecution’s allegations against the defendants have been disproved.
The EFCC instituted the case following a petition by human rights lawyer Femi Falana, SAN, on behalf of Arik Air’s promoters and shareholders over the airline’s receivership and related transactions.
The defendants 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 are facing a six-count charge bordering on alleged conspiracy, stealing and abuse of office.
The prosecution’s case includes allegations concerning the handling of Arik Air’s loan obligations, the transfer of its alleged debt exposure to AMCON and the alleged conversion of ₦4.9 billion belonging to the airline for the use of NG Eagle Limited.
One of the counts alleges that Union Bank, sometime in 2011, made false representations to AMCON concerning Arik Air’s performing loans and bank guarantees, following which a purported ₦71 billion debt exposure was transferred to AMCON.
Another count alleges that Kuru, Omokide and Ilegbodu fraudulently converted ₦4.9 billion belonging to Arik Air to the use of NG Eagle Limited in 2022.
The dispute also raises questions over the exercise of AMCON’s statutory powers and the responsibilities of a receiver-manager appointed to take control of a distressed company.
Section 553(2) of the Companies and Allied Matters Act 2020 requires a receiver-manager to act in the company’s best interests, including preserving its assets and furthering its business objectives.
Whether Arik Air’s receivership involved any breach of statutory obligations or criminal conduct remains for the court to determine.
The defendants were arraigned on January 20, 2025, and pleaded not guilty to all the charges.
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