Arik Air repaid 38% of foreign loan before AMCON takeover, witness tells court

A prosecution witness in the ongoing N76 billion and $31.5 million fraud trial involving Ahmed Kuru, a former managing director of the Asset Management Corporation of Nigeria (AMCON), has told a Lagos court that Arik Air had already repaid 38 per cent of its foreign loan obligations before the airline was taken over.

Bawa Kaltungo, an investigator with the Economic and Financial Crimes Commission (EFCC), made the disclosure on Tuesday while testifying before Mojisola Dada, Justice of the Special Offences Court sitting in Ikeja.

Kuru is standing trial alongside Kamilu Alaba Omokide, Roy Ilegbodu (Captain), Union Bank of Nigeria Plc, and Super Bravo Limited on a six-count charge bordering on conspiracy, stealing and abuse of office.

Led in evidence by Wahab Shittu, prosecution counsel, Kaltungo told the court that documentary evidence recovered during investigations showed that Arik Air was servicing its foreign loan before AMCON intervened.

Read also: How Arik Air’s engine explosion caused 23 wreckages on the aircraft – NSIB

He referenced a letter dated October 4, 2010, sent by Union Bank to Arik Air’s management, which advised on a maturing quarterly repayment obligation tied to an Airbus aircraft financing arrangement.

According to the witness, the letter confirmed that the loan repayment schedule was being adhered to, with payments made as recently as December 2010.

He, however, alleged that despite the loan’s performing status, Union Bank converted a N51 billion guarantee tied to the facility into a loan and sold it to AMCON as a non-performing asset.

“This letter shows that the foreign loan was performing optimally at the time,” Kaltungo said.

The EFCC investigator further alleged that Union Bank failed to remit funds to foreign creditors after converting the guarantee, despite acting as guarantor to the facility.

Read also: EFCC details CBN’s role in Arik Air takeover during fraud trial

He told the court that investigations revealed Arik Air had already repaid 38 per cent of the loan to foreign lenders, which included global financial institutions such as HSBC.

“Union Bank withheld the N51 billion which ought to have been used to settle the foreign creditors,” he said, adding that the bank still owed Arik the equivalent of the repaid portion.

Kaltungo also maintained that Union Bank did not directly extend any loan facility to Arik, noting that the financing originated from foreign credit institutions and was serviced by the airline up until mid-2010.

Providing further insight into the period following AMCON’s takeover of Arik Air in March 2016, the witness said only about N2 billion in loan servicing payments could be traced.

He disclosed that proceeds from the revaluation and sale of three aircraft, valued at approximately $105.7 million (about N32 billion), were not fully accounted for.

According to him, only N9.2 billion from the proceeds was applied toward servicing the airline’s loan, leaving over N28 billion unaccounted for.

“The exact figures are contained in my investigation report before the court,” he said.

Read also: Arik Air loan dispute: Former AMCON executive testifies in ongoing case

Under cross-examination by Taiwo Osinpitan, defence counsel, representing the first and third defendants, Kaltungo admitted that no funds were directly traced to the personal accounts of the accused persons during the investigation.

He also stated that certain documents tendered in evidence were meant to demonstrate that the investigation was conducted professionally and without bias.

According to a statement by Dele Oyewale, EFCC’s spokesman, one of the charges alleges that Union Bank, in 2011, made false representations to AMCON regarding Arik Air’s loan status, leading to the transfer of N71 billion to the corporation.

Another count accuses Kuru and others of fraudulently converting N4.9 billion belonging to Arik Air to the benefit of NG Eagle Limited.

Following proceedings, Dada adjourned the case until May 18, 2026, for the continuation of cross-examination.