The controversial loan facility extended to Arik Air by the Asset Management Corporation of Nigeria (AMCON) has been declared non-performing despite a total injection of N96 billion, a former top executive at the agency revealed in court on Monday.
Mr. Muhammed Abbas Jega, former Executive Director of Credits at AMCON, made this startling disclosure while testifying before Justice Mojisola Dada at the Ikeja Special Offences Court in the ongoing trial of former AMCON Managing Director Ahmed Kuru and four other defendants over an alleged N76 billion and $31.5 million fraud.
The Economic and Financial Crimes Commission (EFCC) has arraigned Kuru alongside Kamilu Omokide (former Receiver Manager of Arik), Roy Ilegbodu (CEO of Arik Air), Union Bank of Nigeria, and Super Bravo Ltd on five counts bordering on theft, dishonest acquisition of property, and abuse of office. Union Bank is also facing allegations of false representation to a public official.
Testifying as the third prosecution witness, Jega disclosed that AMCON had purchased Arik’s loan from Union Bank and Bank PHB for N85 billion during the first phase of its Eligible Bank Assets Purchase Programme. He confirmed that an additional N11 billion was later disbursed to the airline as working capital.
“Despite the substantial financial support provided, Arik could not meet its obligations to AMCON by the time I left office,” Jega stated under cross-examination by Prof. Taiwo Osipitan (SAN), lead counsel to the first defendant.
The witness clarified that while the loan was initially categorized as performing, it later became non-performing due to the airline’s failure to service the debt. He further noted that AMCON also guaranteed intervention funds provided to Arik by the Bank of Industry, raising further questions about the airline’s financial management and viability.
Jega also accused Union Bank of misleading AMCON regarding the actual status of Arik’s debt portfolio, claiming that the bank presented the loan as performing during negotiations, including a meeting in London. He admitted that he never escalated the issue to AMCON’s board or the Central Bank of Nigeria when inconsistencies emerged.
“I never reviewed the original purchase agreement personally. Union Bank stated the loans were performing and even documented a meeting which they convened to explain the structure. But issues surfaced during that discussion,” he explained.
Under further questioning by Mr. Olasupo Sasore (SAN), counsel to Ahmed Kuru, Jega also admitted that Arik’s chairman had approached him with a consultancy offer, which he declined based on advice, citing the troubled state of the airline at the time.
The EFCC’s case against the defendants is based on claims of irregular handling of AMCON-acquired loans, illegal diversion of assets, and misrepresentation to regulators. The trial, which has attracted attention from the legal and financial sectors, is expected to establish new precedents in Nigeria’s asset recovery and public sector accountability.
Arik Air, once Nigeria’s largest airline, was taken over by AMCON in 2017 following mounting debts and management issues. The airline’s collapse became a focal point in Nigeria’s aviation and banking sector crisis, with stakeholders questioning the efficacy of bailouts and oversight mechanisms.
Justice Mojisola Dada adjourned the matter until July 1, 2025, for the continuation of trial proceedings, where more witnesses are expected to testify.