An investigative officer of the Economic and Financial Crimes Commission (EFCC), Bawa Usman Kaltungo, has alleged that Union Bank of Nigeria Plc withheld N51 billion belonging to Arik Air instead of using the funds to settle the airline's foreign loan obligations. He made this disclosure while testifying before Justice Mojisola Dada at a Special Offences Court in Ikeja, Lagos.
Details of the Testimony
Kaltungo, who was led in evidence by prosecution counsel Dr. Wahab Shittu, stated that no forensic audit had been conducted to determine Arik Air's true financial status. The testimony is part of the ongoing trial of former Managing Director of the Asset Management Corporation of Nigeria (AMCON), Ahmed Kuru, and four others over an alleged N76 billion and $31.5 million fraud.
Allegations Against Union Bank
The witness claimed that although Arik Air had repaid 38 percent of its foreign loan before AMCON's intervention, Union Bank allegedly failed to discharge its obligations as guarantor. According to Kaltungo, the bank converted Arik's N51 billion guarantee and held onto the funds instead of remitting them to foreign creditors.
“Arik has paid 38 percent of its loan to foreign creditors, but when Union Bank converted the Arik guarantee of N51 billion, they didn’t pay the foreign creditors from the funds. Union Bank sat on the N51 billion. With N51 billion, Union Bank was supposed to pay the foreign creditors. Our investigation revealed that Union Bank is still owing Arik 38 percent of the paid loan,” he added.
Background of the Case
Ahmed Kuru is standing trial alongside Kamilu Alaba Omokide, Capt. Roy Ilegbodu, Union Bank, and Super Bravo Limited on a six-count charge bordering on conspiracy, stealing, and abuse of office. The witness further maintained that Union Bank did not directly grant any loan to Arik Air, explaining that the facility was sourced from foreign institutions, including HSBC, and was serviced by the airline until June 2010.
Implications of the Allegations
The case highlights ongoing issues in Nigeria's aviation and banking sectors, particularly regarding the management of funds meant for debt servicing. The court proceedings continue as the EFCC seeks to uncover the full extent of the alleged financial mismanagement.
