A former Executive Director of the Asset Management Corporation of Nigeria (AMCON), Abbas Jega, has told a Lagos State High Court that Arik Air consistently failed to cooperate with AMCON’s efforts to recover debts owed to the corporation.
Testifying on Wednesday before Justice Mojisola Dada at the Special Offences Court in Ikeja, Jega painted a picture of prolonged resistance and evasion by the airline, which has been under federal receivership since 2017 due to mounting debts exceeding ₦300 billion.
Appearing as the third prosecution witness in an ongoing trial initiated by the Economic and Financial Crimes Commission (EFCC), Jega provided insight into the complex relationship between Arik Air, Union Bank, and AMCON. The EFCC alleges that Ahmed Kuru, the former AMCON Managing Director, along with other key defendants, Roy Ilegbodu (Managing Director of Arik Air), Kamilu Omokide (Receiver Manager), Union Bank Plc, and Super Bravo Limited, defrauded Arik Air of over ₦76 billion and $31.5 million.
Jega, who once oversaw credit transactions at AMCON, explained that Union Bank initially notified AMCON that it had converted a guarantee issued on behalf of Arik Air into a non-performing loan, in compliance with directives from the Central Bank of Nigeria (CBN).
“It was during a meeting in London with Arik’s foreign lenders that we discovered what Union Bank sold to AMCON was not a loan, but a guarantee,” Jega said. “It was meant to cover Arik’s obligations if it failed. Upon our return, we demanded an explanation from Union Bank and eventually agreed that AMCON would assume responsibility only if Arik defaulted.”
Jega added that despite several invitations, Arik Air’s then-chairman, Johnson Arumemi-Ikhide, repeatedly avoided discussions with AMCON, seemingly under the belief that the airline had no defaulted loans with Union Bank.
“He didn’t realise that once AMCON takes over a loan, you’re blacklisted from borrowing within the banking industry,” Jega explained. “That pressure brought him to the negotiation table, and we signed a restructuring agreement. AMCON even provided additional funds to help Arik remain operational.”
But the cooperation was short-lived.
According to Jega, Arik continued to default, even after receiving financial lifelines. “Arik was unable to adapt to the new structure. They couldn’t raise working capital from the money market anymore, and their operations had become unsustainable.”
He revealed that AMCON explored various rescue strategies, including a proposed debt-for-equity swap that would have made AMCON a shareholder in Arik, resulting in legacy owners losing some control. “We also considered installing a management team, an MD and CFO, to give AMCON financial oversight, and though Arik initially agreed, they kept stalling implementation,” Jega said. “That’s the state of things as of when I left AMCON in 2015.”
Under cross-examination, Jega clarified that two of the accused, Omokide and Ilegbodu, played no role in the acquisition of the loan from Union Bank or in the critical London meeting involving Arik’s foreign creditors.
He attributed Arik’s financial collapse to over-trading, the airline’s tendency to overextend operations beyond its financial capacity, which compounded its inability to repay obligations.
At the time of Jega’s departure from AMCON in 2015, Arik owed the corporation over ₦100 billion, a debt he says remained unpaid.
He also noted that Arik’s exposure to AMCON included loans acquired from both Union Bank and Keystone Bank, while additional liabilities from Zenith Bank were acquired after his exit from the agency.
The court adjourned proceedings until June 30, July 1, and July 2, for the continuation of Jega’s cross-examination.
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