A former Executive Director at the Asset Management Corporation of Nigeria (AMCON), Mr Abbas Muhammed Jega, has given revealing testimony before the Special Offences Court in Ikeja, Lagos, presided over by Justice Mojisola Dada.
Shedding light on the troubled financial dealings between Arik Air and the federal asset recovery agency.
Jega, who appeared on Wednesday as the third prosecution witness in the ongoing trial involving the former Managing Director/CEO of AMCON, Mr Ahmed Kuru, and four others, detailed a series of failed negotiations, non-cooperation by Arik’s leadership, and financial mismanagement that contributed to the airline’s ballooning debt profile.
Other defendants in the legal action include Kamilu Omokide, a former receiver manager of Arik Air; Captain Roy Ilegbodu, the airline’s CEO; Union Bank of Nigeria; and Super Bravo Limited.
The charges against them involve alleged financial misappropriation totalling N76 billion and $31.5 million.
In his testimony, Jega, who served as AMCON's Executive Director in charge of Credit, recounted the controversial loan transaction that brought Arik Air under AMCON’s scrutiny.
He explained that Union Bank, in compliance with the Central Bank of Nigeria’s directive to dispose of non-performing loans, sold what it claimed was a loan exposure to Arik.
However, Jega revealed that during a critical meeting held in London with Union Bank and foreign lenders, it was discovered that what had been sold to AMCON was not a standard loan but rather a financial guarantee issued by Union Bank to foreign financiers on behalf of Arik.
“We first realised in that London meeting that what Union Bank sold to us wasn’t a loan, but a guarantee. In the event Arik defaulted, Union Bank was obliged to cover the payments,” Jega told the court.
Upon returning to Nigeria, AMCON summoned Union Bank officials to clarify the arrangement.
According to Jega, AMCON initially agreed to reimburse Union Bank, understanding that it would only step in to make payments if Arik failed to meet its obligations.
Jega also painted a picture of a strained relationship between Arik Air and AMCON, describing how the airline’s Chairman, Sir Johnson Arumemi-Ikhide, consistently avoided discussions with the corporation.
“He was avoiding discussions with us, perhaps because he didn’t believe he owed Union Bank any loan.
“But he didn’t realise that once AMCON takes over your debt, you’re blacklisted from borrowing in the Nigerian banking system. That brought him to the negotiation table,” Jega said.
According to Jega, a loan restructuring agreement was eventually reached, adding that AMCON went further by extending additional credit to the struggling airline to ease its working capital challenges.
He said despite these efforts, Arik failed to meet repayment terms.
“At the time we took over, the facility was performing. But after AMCON took over, it stopped. Arik couldn’t access working capital anymore and defaulted,” Jega explained.
Faced with the deteriorating financial position of Arik Air, Jega said AMCON pursued various options to stabilise the airline.
These, according to him, included a debt-equity swap proposal where AMCON would become a shareholder in exchange for converting debt into equity, and another plan involving direct management control.
“We proposed to appoint a Managing Director and Chief Financial Officer to restore order.
“Arik initially agreed, but implementation was delayed endlessly. That was the stage the matter was at when I exited AMCON in 2015,” Jega testified.
Under cross-examination, Jega acknowledged that neither Kamilu Omokide nor Captain Roy Ilegbodu played any part in the acquisition of Arik’s loan from Union Bank.
He also confirmed they were not present at the London meeting where the true nature of the financial arrangement was uncovered.
Pressed further, Jega admitted that Arik Air’s failure to meet its obligations stemmed largely from “over-trading”, expanding beyond its financial and operational capacity, which left the airline unable to service its ballooning debts.
By the time he left AMCON, Arik’s indebtedness had exceeded N100 billion, Jega said, and the figure remained outstanding.
He also noted that AMCON’s exposure to Arik included loans originally owed to both Union Bank and Keystone Bank.
Additional debts from Zenith Bank were acquired by AMCON after his departure, Jega stated.
Justice Dada adjourned the case to June 30, July 1, and July 2, 2025, for the continuation of Jega’s cross-examination.
AMCON took over Arik Air in 2017 after the airline failed to repay its debts, which had accumulated over the years of poor financial management and operational issues.
The move was aimed at preventing a total collapse of Nigeria’s largest carrier at the time, which had once controlled a significant share of the local aviation market.
Since then, Arik has operated under receivership, while legal disputes have continued to trail its collapse.
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