A former Executive Director of Credits at the Asset Management Corporation of Nigeria (AMCON), Mr. Muhammed Abbas Jega, testified in a Lagos Special Offences Court that Arik’s debt to AMCON is categorized as a non-performing loan.
The former Managing Director of AMCON, Ahmed Kuru, along with four others, is facing charges related to fraud amounting to N76 billion and $31.5 million.
The other defendants include Kamilu Omokide, the former Receiver Manager of Arik Air Ltd., Roy Ilegbodu, the Chief Executive Officer of the airline, Union Bank, and Super Bravo Ltd.
They are on trial for five counts of charges involving theft, abuse of office, and the dishonest acquisition of another’s property. Union Bank faces a separate count for making false statements to a public officer.
During the continuation of his cross-examination on Wednesday, Jega informed the court that Arik’s debt with AMCON is classified as a non-performing loan according to regulatory agencies in Nigeria.
Previously, during his last testimony, he stated that the Arik loan, which AMCON purchased during the first phase of the Eligible Bank Asset (EBA) purchase, was performing.
However, under cross-examination by the first Defence Counsel, Prof. Taiwo Osipitan (SAN), Jega retracted his earlier assertions.
He clarified that the AMCON leadership, of which he was a part as an executive director, purchased a total debt of N85 billion from Union Bank and Bank PHB related to Arik.
Additionally, he mentioned that AMCON provided an extra loan of N11 billion as working capital to Arik. Despite the funds AMCON injected, along with intervention funds from the Bank of Industry that AMCON guaranteed, Jega stated that Arik was unable to meet its obligations to AMCON up until the time he left.
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He explained, “Although I served as the executive director of credits at AMCON and conducted all my actions with board approval, I never reviewed the loan purchase agreement that detailed the credit specifics concerning the distressed Arik loan from Union Bank.
“Union Bank had informed me that all loans were performing, but when I left AMCON in 2015, the Arik loan was classified as non-performing. Initially, Arik was meeting its obligations to Union Bank, and the bank confirmed that there was no default on their part.
“I saw minutes from meetings in London related to this issue, but they were drafted and sent to AMCON by Union Bank.”
Jega reiterated that he believed Union Bank had misled AMCON. It was only after the London meeting between the obligor and AMCON’s management that he realized there were problems with the purchase.
However, he could not explain why he did not escalate the situation to both the board of AMCON and the Central Bank of Nigeria.
Furthermore, Jega admitted that, aside from the guarantees, Arik Air and its promoters had other loans with AMCON.
During cross-examination by Kuru’s Counsel, Mr. Olasupo Sasore (SAN), he confirmed that the Chairman of Arik had once approached him to take on a consultancy role at Arik, but the offer did not materialize.
“AMCON was already facing challenges when I was offered the consultancy role, and I was advised to decline it. My relationship with all my clients has always been purely professional,” he stated.
Justice Mojisola Dada adjourned the case until July 1 for the continuation of the trial.
