EFCC Witness Says Arik Air Had No Bad Debt, Faults Receivership

A director of the Economic and Financial Crimes Commission (EFCC), Bawa Usman Kaltungo, advised a Lagos State Special Offences Court in Ikeja that Arik Air owed no cash to Union Bank of Nigeria Plc, describing the airline’s receivership as fraudulent and primarily based on a non-existent dangerous debt.

Kaltungo, who’s the Director of the EFCC’s Lagos Zonal Directorate 2, made the declare whereas testifying because the fourth prosecution witness within the ongoing trial of former Managing Director of the Asset Management Corporation of Nigeria (AMCON), Ahmed Kuru, and 4 different defendants over alleged fraud involving N76 billion and $31.5 million.

The witness, who led the EFCC staff that investigated the petition towards Arik Air, testified earlier than Justice Mojisola Dada.

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During cross-examination by the counsel to the second defendant, Uyi Giwa-Osagie, Kaltungo mentioned his investigation revealed that the purported dangerous debt used to nominate a receiver-manager over Arik Air didn’t exist.

“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 advised the court docket.

Kaltungo additionally claimed that he knowledgeable AMCON’s high administration at a gathering that Arik Air was not indebted to Union Bank and that the appointment of the receiver-manager to take management of the airline was faulty.

However, the witness maintained that Kuru, as AMCON’s managing director and chief government officer, had in depth powers and unilaterally sanctioned the appointment of the receiver-manager.

The assertion prompted Giwa-Osagie to tender AMCON board resolutions to problem the declare that Kuru alone had authorised the receivership.

The defence counsel argued that the paperwork have been related to establishing the circumstances surrounding the choice and figuring out his shopper’s alleged function within the transactions.

He maintained that Kuru was not standing trial over the overall propriety of AMCON’s powers to nominate a receiver-manager, however over the particular allegations contained within the cost sheet.

The prosecution opposed admitting the resolutions, arguing that the paperwork have been too distant from the problems earlier than the court docket.

Giwa-Osagie countered that the resolutions have been public data emanating from AMCON’s board and could possibly be tendered from the Bar.

In her ruling, Justice Dada admitted the paperwork, holding that they emanated from AMCON’s board as a company physique and had been duly licensed in accordance with Section 104 of the Evidence Act.

The admission of the resolutions offers the defence documentary materials with which to problem the prosecution witness’s account of Kuru’s function in approving the receivership.

However, the court docket’s choice to confess the paperwork doesn’t decide the legality of the receivership or any defendant’s guilt or innocence.

The case arose from a petition by human rights lawyer Femi Falana, SAN, on behalf of Arik Air’s promoters and shareholders, regarding the airline’s receivership and associated transactions.

The defendants are Kuru; Kamilu Alaba Omokide, a former receiver-manager of Arik Air; Captain Roy Ilegbodu, the airline’s chief government officer; Union Bank of Nigeria Plc; and Super Bravo Limited.

They are going through a six-count cost bordering on conspiracy, theft, and abuse of workplace. They pleaded not responsible once they have been arraigned on 20 January 2025.

One depend alleges that, in 2011, Union Bank made false statements to AMCON about Arik Air’s performing loans and financial institution ensures, ensuing within the switch of an allegedly bogus N71 billion debt publicity to the company.

Another depend accuses Kuru, Omokide and Ilegbodu of fraudulently changing N4.9 billion belonging to Arik Air for NG Eagle Limited’s use in 2022.

The prosecution’s case additionally considerations how the airline dealt with its mortgage obligations, transferred its debt publicity to AMCON, and carried out transactions involving its belongings.

The dispute raises questions on AMCON’s train of its statutory powers and the tasks of a receiver-manager appointed to take management of a distressed firm.

Section 553(2) of the Companies and Allied Matters Act 2020 units out obligations regarding a receiver-manager’s conduct, together with appearing within the firm’s finest pursuits and preserving its belongings.