By Akin Kuponiyi
An Assistant Director of the Economic and Financial Crimes Commission, EFCC, Bawa Usman Kaltungo, while being led in evidence on Tuesday told Special Offences Court in Lagos that Arik Air has no direct loan obligation to Union Bank of Nigeria Plc.
He insisted that the bank only acted as a guarantor in a foreign loan arrangement for Arik Airline that was later restructured and transferred to the Asset Management Corporation of Nigeria AMCON.
Testifying before Justice Mojisola Dada in the ongoing trial of former Managing Director of AMCON, Ahmed Kuru, and others, the witness told the court that Union Bank “illegally converted” a performing foreign loan obtained by Arik Air into a non-performing loan (NPL) and subsequently sold it to the Asset Management Corporation of Nigeria (AMCON).
The defendants in the case include Ahmed Kuru, former receiver-manager of Arik Air, Kamilu Omokide; the airline’s Chief Executive Officer, Roy Ilegbodu; Super Bravo Limited; and Mohammed Abbas Jega.
They are facing charges bordering on conspiracy, stealing, abuse of office, and making false statements, allegedly connected to the diversion and unlawful conversion of Arik Air’s assets valued at N76 billion and $31.5 million.
Led in evidence by the prosecutor Wahab Shittu SAN, the witness maintained that Union Bank of Nigeria Plc was not the original lender to Arik Air but rather participated in the transaction as a guarantor for the foreign lenders.
According to him, the arrangement was later “mis -characterized” when the facility was converted into a non-performing loan (NPL) and sold to AMCON.
Kaltungo also told the court that Arik Air had already repaid approximately 38 per cent of the foreign loan before Union Bank allegedly reclassified the facility as non-performing.
He further told the court that the classification enabled the bank to package and sell the loan to AMCON for about N51 billion, on the basis that the airline had defaulted entirely on its obligations.
The EFCC official, however, insisted that this representation was inaccurate, stating that Arik Air’s partial repayments were not reflected in the transaction structure.
He contended that Union Bank subsequently retained the N51 billion proceeds from the sale instead of applying it to offset the outstanding foreign loan exposure, adding that this created a financial imbalance that left the bank indebted to Arik Air to the extent of funds already repaid to foreign lenders.
The witness also gave detailed testimony on the disposal of Arik Air’s assets, including shares and aircraft, which form part of the broader allegations of mismanagement and fraudulent conversion of the airline’s assets.
He told the court that Arik Air’s shares in Zenith Bank were sold for over N2 billion, while three aircraft belonging to the airline were also disposed off for approximately $105.7 million.
However, he alleged that only about N9.2 billion of the proceeds was applied to the airline’s loan obligations, leaving more than N28 billion unaccounted for.
Kaltungo described the disparity as part of what investigators considered significant gaps in financial accountability in the handling of Arik Air’s assets.
He further told the court that investigations revealed widespread deficiencies in record-keeping, with several transactions either poorly documented or entirely unsupported by verifiable records.
The witness said investigators discovered that a brand-new aircraft engine was missing from storage during an inspection.
He told the court that there was no documentation authorizing its removal, no inventory record reflecting its movement, and no explanation from relevant personnel regarding its whereabouts.
He described the incident as indicative of systemic lapses in asset management.
He further testified that several aircraft belonging to Arik Air were used as collateral for the facility and were independently valued by international assessors.
However, he noted that there were inconsistencies between the value of the collateral and the outstanding loan exposure, stating that while the loan was estimated at about N37 billion, the collateral value was placed at approximately N75 billion.
According to him, this raised questions about the integrity and structure of the financial arrangement, particularly in relation to risk exposure and valuation methodology.
Kaltungo also told the court that a receiver-manager was appointed in February 2017 to take over the financial management of Arik Air.
However, he said that shortly after the appointment, loan servicing deteriorated and eventually stopped, worsening the airline’s financial position.
Under cross-examination by Prof. Taiwo Osipitan (SAN), counsel to the defendants, the witness was challenged on the methodology of his investigation and the conclusions drawn from available records.
Osipitan SAN questioned whether the EFCC conducted a forensic audit of the transactions in dispute.
In response, Kaltungo admitted that no forensic audit was carried out, adding that he did not consider it necessary because, in his view, the transactions were not complex
When asked about his understanding of receivership arrangements, Kaltungo distinguished between a receiver and a receiver-manager, stating that a receiver has no authority to manage a company’s operations, while a receiver-manager is empowered to run the affairs of a company under receivership.
Further cross-examination also revealed that,the defence counsel also drew attention to gaps in the EFCC’s investigation, particularly the absence of forensic accounting analysis, raising questions about the strength of the conclusions being relied upon by the prosecution.
The court adjourned the matter until May 18 and 19, 2026, for continuation of trial
