A former Executive Director at Asset Management Corporation of Nigeria (AMCON), Mr Abbas Muhammed Jega, on Wednesday, June 4th, appeared at the Special Offences Court in Ikeja, Lagos, to testify in the ongoing case between the Economic and Financial Crimes Commission (EFCC) vs the ex-AMCON MD/CEO, Ahmed Kuru, Kamilu Omokide, a former receiver manager of Arik Air Ltd; Captain Roy Ilegbodu, the airline’s CEO; Union Bank Ltd; and Super Bravo Ltd.
Jega appeared as the third prosecution witness in the ongoing trial of the former AMCON boss, Mr. Ahmed Kuru, and four others, who are standing trial over alleged financial misappropriation amounting to N76 bn and $31.5m. The matter is presided over by Justice Mojisola Dada.
Providing the court with the details of what he could recollect about the Arik Air/Union Bank business relationship that went bad, Jega recalled that following the directive of the Central Bank regarding the dumping of non-performing loans to AMCON, Union Bank had informed AMCON that the CBN told them to collapse the guarantee of Arik into a loan because of the huge amount involved in the Union Bank had exceeded the single obligor limit allowable by the apex bank.
Jega whose directorate in AMCON was in charge of the transaction (as Executive Director, Credit) disclosed that it was in a certain meeting held in London that we ‘first knew that what Union Bank sold to us was not a loan but a guarantee given to some foreign lenders, that in the event Arik died or burnout, Union Bank will pay the installments.’
He said, “When we came back to Nigeria… we now invited the Union Bank to explain why AMCON should pay for the guarantee. At the end of the deliberations, AMCON agreed with Union Bank that the money paid should be returned to AMCON, so that if Arik does not pay any installment, AMCON will make the payment on behalf of Arik. We (AMCON) invited Arik to resolve the issue with Union Bank.
However, AMCON sources have confirmed that the arrangement disclosed by Jega never existed. AMCON, being a recovery agency of the federal government of Nigeria, was never in a position to take over the repayment of an obligor’s exposure to foreign lenders, particularly when it never had any concrete arrangement with the obligor for the same.
Jega also disclosed that the Chairman of Arik, Sir Johnson Arumemi-Ikhide, was avoiding a discussion with us (AMCON), probably because he believed he shouldn’t be talking to AMCON, because he didn’t have an NPL with Union Bank. But he didn’t realise that some of the measures put in place by the system were that if AMCON takes over your loan, you cannot borrow in the banking industry. This forced him to come to the table. We signed some agreements on how to restructure the loans.
He said that after the restructuring agreement, AMCON gave Arik even more money to help them sort out their working capital problems. As a result, AMCON created additional loan facilities for Arik, but Arik still failed to meet their repayment obligation to AMCON.
He added that, “At the time AMCON took over Union Bank, the guarantee was performing, but since AMCON took over Arik, it stopped performing because the nature of the facility had changed, and Arik was not amenable to that change. It was unable to source its working capital from the money market. This complicated both the relationship between Arik/AMCON and the ability of Arik to honour its obligations.
“We tried in AMCON to save the situation through a debt equity swap, but the burden in AMCON’s books cannot be sustained by the airline. We also proffered a solution where AMCON becomes a shareholder in Arik, and the legacy owners will lose some control. We took steps to implement this option, but Arik refused.
“The second option was to have management control in Arik. To appoint MD and CFO, so that AMCON can have both oversight and financial control. Initially, Arik agreed. But they dragged in the implementation. This was the stage at which the matter was when I left AMCON.”
Upon cross-examination, Jega confirmed that Kamilu Omokide and Capt Ilegbodu never played any role in the purchase of the loan from Union Bank, nor did they play any role in the so-called London meeting between Union Bank, AMCON and Arik’s foreign lenders.
Jega also confirmed during cross-examination that Arik’s inability to repay was a result of over-trading by Arik, that is, stretching beyond its capacity and leading to their inability to service existing and due debts. He confirmed Arik’s indebtedness to AMCON as at the time of his exit in 2015 was over N100bn, and the same remained unpaid.
He further disclosed that the Arik loans acquired by AMCON were not limited to Union Bank but also included Keystone Bank. But the Zenith Bank loan was purchased after his exit, leading to the level of exposure Arik had to AMCON.
The matter was adjourned to 30th June, 1st and 2nd July 2025 for the continuation of cross-examination of Abass Jega.
