Alleged N76bn, $31.5m fraud: Arik had repaid 38% of foreign loan before AMCON takeover — Witness

A prosecution witness in the ongoing trial over an alleged N76 billion ($31.5 million) fraud has told the court that Arik Air had settled 38 percent of its foreign loan obligations before the Asset Management Corporation of Nigeria (AMCON) assumed control of the airline.

The witness, Bawa Usman Kaltungo, gave the testimony before Justice Mojisola Dada at the special offences court in Ikeja, Lagos, during proceedings involving former AMCON managing director Ahmed Kuru and other defendants.

According to the witness, Arik Air had been servicing the foreign loan obtained from international lenders, with repayment structured on a quarterly basis.

He explained that documentary evidence recovered during investigations showed that payments were made as scheduled, including a final quarter repayment in December 2010, indicating the loan was performing.

“The letter is titled ‘Advice on Maturing Quarterly Repayment Obligations Second Airbus A240/500/MRM 912,” he said, adding that the document confirmed the loan’s active repayment status.

Kaltungo further alleged that Union Bank converted the airline’s guarantee into a loan and transferred it to AMCON as a non-performing facility, despite evidence showing otherwise.

“Arik has paid 38 percent of its loan to foreign creditors,” he said.

He added: “However, when Union Bank converted the Arik guarantee of N51bn, it did not pay the foreign creditors from the funds.

“Union Bank withheld the N51bn. With this amount, Union Bank was supposed to pay the foreign creditors.

“Our investigation revealed that Union Bank still owes Arik 38 percent of the paid loan.”

The witness also told the court that the loan facility was sourced from foreign institutions, including HSBC, and not directly issued by Union Bank.

He said findings showed discrepancies in how funds were handled after AMCON’s takeover, noting that only a portion of proceeds from asset sales was applied to the loan, while a significant balance remained unaccounted for.

Under cross-examination, Kaltungo stated that no funds were traced to the personal accounts of some of the defendants during the investigation.

The case has been adjourned to May 18, 2026, for continuation of proceedings.