A former Group Executive Director of Union Bank Plc, Mr Austine Obigwe, has told a Lagos State Special Offences Court that a $2.3 million debt owed to his private company, Staal, by Arik Air, was written off in 2011 due to the airline’s financial struggles, not as part of any fraudulent activity.
Obigwe gave the testimony on Wednesday during cross-examination in the ongoing trial involving former Managing Director of the Asset Management Corporation of Nigeria (AMCON), Mr Ahmed Kuru, and four others who are being prosecuted for allegedly misappropriating N76 billion and $31.5 million.
Appearing before Justice Mojisola Dada in Ikeja, Obigwe, who is the second prosecution witness in the case brought by the Economic and Financial Crimes Commission (EFCC), explained that the $2.3 million debt was deemed irrecoverable after Arik Air ran into operational and financial difficulties.
“I am not interested in collecting it. I wrote it off when I discovered that Arik Air started having challenges,” Obigwe told the court.
Standing trial alongside Kuru is the former receiver manager of Arik Air Limited, Mr Kamilu Omokide; Arik CEO, Captain Roy Ilegbodu; Union Bank of Nigeria Plc; and Super Bravo Limited.
They are facing a six-count charge of conspiracy, stealing, and abuse of office.
All the defendants pleaded not guilty and were granted bail in the sum of N20 million each, with one surety in like sum.
Under intense cross-examination by leading defence counsel, including Olasupo Shasore (SAN), Olalekan Ojo (SAN), and Tayo Oyedepo (SAN), Obigwe admitted to having a personal relationship with Arik founder, Sir Johnson Arumemi-Ikhide.
However, he clarified that he had no formal role within the airline at the time the debt was written off.
Having exited Union Bank in 2009, Obigwe said he transitioned into consultancy roles, including with Arik and other firms.
Reflecting on his time at the bank, he noted that he had been part of a team tasked with inspecting Arik Air’s fleet to assess its value and condition.
“In 2009, I was part of a team that inspected 26 aircraft belonging to Arik. Lufthansa did the evaluations, and I had no reason to doubt their assessment.
“The goal was to ensure that the airline’s assets had not been depleted,” he testified.
He further affirmed that Arik Air met its loan obligations with Union Bank during his tenure.
“To the best of my knowledge, Arik Air was servicing its loan with Union Bank. We did not receive any reports from other banks indicating defaults,” he said.
Asked about a letter dated April 23, 2009, allegedly sent by AMCON to Union Bank concerning a N46.11 billion debt owed by Arik, Obigwe told the court he was unaware of such correspondence before leaving the bank.
Providing clarity on Union Bank’s financial relationship with Arik, Obigwe stated that the bank acted as a guarantor in a multi-party aircraft financing deal involving the US Export-Import Bank (EXIM), Germany’s Coface, and the UK’s Export Credits Guarantee Department (ECGD).
“There was no direct cash disbursement from Union Bank. The bank simply guaranteed 85 per cent of the financing,” he said.
This arrangement, he explained, allowed Arik Air to acquire five aircraft, three Boeing 737-800s for domestic routes and two Airbus A340-500s for international flights to London and New York.
He lamented Nigeria’s shrinking international aviation presence, noting that since Arik Air halted its direct New York route, no Nigerian carrier has resumed the service.
“Unfortunately, since Arik stopped flying to New York, no other Nigerian airline has picked up that route,” he said.
Obigwe reaffirmed that all credit facilities extended to Arik by Union Bank were performing up to the time he left in 2009.
He also elaborated on standard procedures banks use to manage non-performing loans, stating: “A lender may choose to transfer the loan, reassign it, or enforce the security backing the loan.
“The law empowers the lender to dispose of the collateral in cases of default.”
Earlier in the trial, Obigwe recounted how Union Bank’s international banking arm oversaw complex aircraft financing projects for Arik Air.
He noted that these transactions involved multiple jurisdictions and were pivotal in supporting Nigeria’s aviation growth at the time.
Justice Dada adjourned the matter until June 4, 2025, for the continuation of the trial.
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