A prosecution witness in the alleged N76 billion fraud trial involving former Managing Director of the Asset Management Corporation of Nigeria (AMCON), Ahmed Kuru, has challenged the basis for Arik Air’s receivership, telling a Lagos court that the airline was not indebted to Union Bank of Nigeria Plc.
The witness, Bawa Usman Kaltungo, Director of the Lagos Zonal Directorate 2 of the Economic and Financial Crimes Commission (EFCC), described the circumstances surrounding the appointment of a receiver-manager over the airline as fraudulent, insisting that the alleged bad debt used to justify the action did not exist.
Kaltungo, the fourth prosecution witness, gave the testimony before Justice Mojisola Dada of the Special Offences Court sitting in Ikeja during cross-examination by Uyi Giwa-Osagie, counsel to the second defendant, Kuru.
He said his team investigated a petition relating to Arik Air and subsequently informed AMCON’s top management that the airline was not indebted to Union Bank and that the appointment of a receiver-manager was defective.
“The foundation for the appointment of a receivership over Arik Air was fraudulent and faulty. There was no bad debt; it does not exist,” the witness said.
However, proceedings took a significant turn when Giwa-Osagie tendered AMCON board resolutions to challenge the prosecution’s account of Kuru’s involvement in the receivership decision.
The court admitted the documents despite the prosecution’s objection, holding that they emanated from AMCON’s board as a corporate body and had been certified in line with Section 104 of the Evidence Act.
During the cross-examination, Kaltungo maintained that Kuru, who served as AMCON’s managing director and chief executive officer, had extensive powers and personally authorised the appointment of a receiver-manager over Arik Air.
The defence counsel challenged this assertion, arguing that the board resolutions were relevant to determining whether the decision was taken by Kuru alone or through AMCON’s corporate decision-making process.
Opposing their admission, the prosecution argued that the documents were too remote to the issues before the court.
Giwa-Osagie, however, submitted that the resolutions were necessary to establish the circumstances surrounding the receivership and assess his client’s alleged role in the offences.
He told the court that Kuru was not being prosecuted over the general propriety of AMCON’s power to appoint a receiver-manager, but over the specific allegations contained in the charge.
The defence counsel further argued that the documents constituted public records that could be tendered from the Bar.
In her ruling, Justice Dada admitted the resolutions, holding that they were relevant to the proceedings and had been duly certified in accordance with Section 104 of the Evidence Act.
The ruling allows the defence to rely on the documents in challenging the witness’s claim that Kuru unilaterally approved the receivership.
However, the admission of the resolutions does not amount to a determination of the legality of Arik Air’s receivership or establish the guilt or innocence of any of the defendants. Their evidential significance will be considered in the course of the trial.
The case arose from 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.
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 conspiracy, stealing and abuse of office.
Among the allegations being prosecuted by the EFCC is that Union Bank made false representations to AMCON regarding Arik Air’s performing loans, leading to the transfer of an alleged N71 billion debt exposure to the corporation.
One of the counts alleges that Union Bank, sometime in 2011, made false statements to AMCON concerning Arik Air Limited’s performing loans, with the intention of inducing the sale of the airline’s loans and bank guarantees.
The charge further alleges that the representations resulted in the transfer of what the prosecution described as a bogus N71 billion figure to AMCON.
Another count accuses Kuru, Omokide and Ilegbodu of fraudulently converting N4.9 billion belonging to Arik Air to the use of NG Eagle Limited in 2022.
The allegations form part of the wider dispute over the airline’s loan obligations, the transfer of its debt exposure to AMCON, the appointment of a receiver-manager and the handling of its assets during the receivership.
The proceedings also bring into focus the statutory responsibilities attached to receivership arrangements under Nigerian company law.
Section 553(2) of the Companies and Allied Matters Act 2020 sets out obligations relating to a receiver-manager’s conduct in the interests of the company, including the preservation of its assets and the furtherance of its business objectives.
Whether the transactions involving Arik Air breached any statutory obligations or amounted to criminal conduct remains for the court to determine on the evidence presented by the prosecution and defence.
The defendants were arraigned on January 20, 2025, and pleaded not guilty to all six counts.
