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Arik Air, Shareholders Trade Accusations Over N120b Alleged Fraud

There has been a war of words between the Arik Air management and its shareholders over alleged N120 billion fraud and attendant investigation by the Economic and Financial Crimes Commission (EFCC). While the management insisted that nothing was amiss and that the fraud petition was a false alarm by “a serial debtor”, the shareholders said that all parties should submit to anti-graft investigation to unravel the mismanagement of assets. It will be recalled that the Asset Management Corporation of Nigeria (AMCON), Arik Air (in-Receivership), and shareholders of the airline (led by its Chairman, Johnson Arumemi-Ikhide), have been battling over ownership of the airline that AMCON took over in 2017. The fresh twist to the controversy was due to the sale of a CRJ 1000 aircraft that used to be in the operation of Arik Air, but was deregistered by its foreign owners in 2022. The development has led to a fraud petition and EFCC’s probe of Arik Air. Receiver Manager, Kamilu Omokide, in a statement, said the petition filed was instigated by Sir Arumemi-Ikhide (the majority shareholder in Arik), allegedly owing AMCON N240 billion as of May 31, 2022. “The wild allegations of the misappropriation of N120 billion in the petition are manifestly and patently false and amount to no more than well-concocted lies as part of a deliberate campaign of calumny against the Receiver Manager, to abort the ongoing receivership in Arik. Indeed, even on the face of the petition, the claims do not add up to N120 billion. It is made up as a publicity stunt,” Omokide stated. The petition, he argued, presented a “disingenuous and deceptive portrayal of actions, which are the typical responsibilities and actions of a Receiver/Manager – falsely implying criminal intent. The reality is very different. Instead, the Receiver Manager seeks only to recover for the Nigerian people, monies owed to them by this recalcitrant debtor.” He said the petition, and as being presented in the media, suggested underhand sales of assets, including a CRJ aircraft, which was only leased by Arik and has been reclaimed by its owners. Also, the petition suggested a criminal intent in respect of the JV financing of certain wet lease operations. “These JV financings were innovative ways of raising capital due to restrictions on Arik borrowing powers – as it is a company that is technically insolvent and being kept alive only by the magnanimity of AMCON, and Federal aviation agencies.” Furthermore, the petition raised concerns about the teardown of a Boeing 737-700 aircraft registered as 5N-MJI – which had been abandoned and cannibalised in Malta ever since 2013, by Arik under the then leadership of Sir Johnson, and years before the receivership commenced. “This was a professionally taken decision on an aircraft that was Beyond Economic Repairs (BER) and stood the chance of being sent to the graveyard by authorities of the relevant airport in Malta. The pre-teardown valuation of the Aircraft by McLarens (a foremost Aircraft valuation company) valued the Aircraft at $1.5 million. This was, however, seized by Lufthansa Technik over Arik’s indebtedness incurred pre-receivership. “All patriotic Nigerians should be deeply concerned by the influence peddling of a recalcitrant debtor to instigate security agencies against a public-interest receivership. The desperate resort by Sir Arumemi Johnson to all forms of bullying, ‘shake down attempts’ and other underhand tactics is pitiful,” he stated. But in a reply, the Media Office of the Arik Air shareholders said they were not new to EFCC investigations and had consistently been found clean. “It speaks to equity and reasonableness, therefore, the ongoing investigations by the anti-graft agency should be respected by all parties and allowed to run its course without interference,” the group stated. They explained that before the receivership by AMCON, Arik Air Limited was valued at the sum of $3.7 billion by the Deloitte of London. “This valuation is a product of months of forensic review of all assets and visits to all worldwide stations, including the Nigerian base by the valuers in 2014. It should be recalled that AMCON through an ex parte order in suit No. FHC/L/CS/175/17obtained on 8th February in 2017 based upon allegations of indebtedness of N141 billion – the sum which is less than five per cent of the valuation of the airline. “It should be noted that in 2021, Arik Air shareholders through the airline’s vice chairman, Senator Aniete Okon, made a public demand for AMCON to file the statement of affairs of the company for the shareholders to ascertain the state of the alleged indebtedness, but AMCON bluntly refused and resorted to name calling. “Upon news of sales of some Arik Air assets and inventory in the international aviation circuit, Arik Air Limited lawyers resorted to private investigations, which culminated in a recent petition to the EFCC. It should be noted that EFCC visited the Arik Air Headquarters in Lagos and spent four days for on-site investigation. “We, therefore, plead that all parties restrain themselves from overreaching or meddling with the investigation. “Consequently, we believe that it serves equity and respect that nobody should disparage the anti-graft agency, nor fan embers of discord between agencies of government and or persons but encourage them to do their work in the best interest of justice,” the shareholders stated.

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