A former Group Executive Director in Corporate and International Banking at Union Bank, Mr. Austine Obigwe testified in the ongoing trial of the former Managing Director of the Asset Management Corporation of Nigeria, AMCON, and four other defendants as he detailed how he wrote off a $2.3 million debt owed by Arik Air to his private company, Staal.
He gave his testimony on Wednesday before Justice Mojisola Dada of the Special Offences Court, Ikeja
The Economic and Financial Crimes Commission, EFCC charged the defendants to court for allegedly defrauding Arik Air of N76 billion and $31.5 million.
The other defendants being prosecuted by EFCC on a six-count charge bordering on conspiracy, stealing, and abuse of office are; Mr. Kamilu Omokide, a former receiver manager of Arik Air Limited; Captain Roy Ilegbodu, Arik Air Chief Executive Officer; Union Bank Limited; and Super Bravo Limited.
The defendants had pleaded not guilty to the charges and the trial judge, Justice Dada subsequently granted them bail in the sum of N20m each, with one surety in like sum.
Under cross examination, Mr. Obigwe told the court that in 2011, two years after he left Union Bank, Arik Air was indebted to his company, Staal, in the sum of $2.3m.
Obigwe told the court that the amount was never repaid but that he had written it off due to the operational difficulties faced by the airline at the time.
“I am not interested in collecting it. I wrote it off when I discovered that Arik Air started having challenges.”
The witness also confirmed that after his exit from Union Bank, he began consultancy engagements with Arik Air and other companies.
When asked whether the founder of Arik Air, Sir Johnson Arumemi-Ikhide, was a personal acquaintance, he responded in the affirmative, noting that although he currently has no formal relationship with Arik Air, he maintains a relationship with Arumemi-Ikhide.
During cross-examination by Defence Counsel by Olasupo Shasore, SAN on behalf of the second defendant; Olalekan Ojo, SAN on behalf of the fourth defendant; and Tayo Oyetibo, SAN on behalf of the fifth defendant, the former executive of Union Bank stated that in 2009, he participated in an inspection of 26 aircraft belonging to Arik Air.
He stated that the aircraft were found to be airworthy and in good condition, based on assessments provided by Lufthansa.
According to him, “I had no reason to doubt Lufthansa’s evaluation,” he said, adding that the purpose of the inspection was to ensure that the airline’s fleet had not been depleted.
When asked about the airline’s compliance with its loan obligations, the prosecution witness testified that during his tenure at Union Bank, there were no complaints from other financial institutions suggesting that Arik Air was defaulting on its loan obligations. He also confirmed that, to the best of his knowledge, Arik Air was servicing its loan with Union Bank during his tenure.
Responding to a letter dated 23rd April, 2009 allegedly written by AMCON to Union Bank concerning a N46.11 billion debt owed by Arik Air, Obigwe stated that the letter was not brought to his attention while he was still with the bank.
On the character and management of Arik Air, he said: “I can only speak for the period I was there. When I was in Union Bank, Arik Air was one of the best companies.”
When questioned on the options available to lenders when a loan becomes non-performing, the witness replied that the lender may choose to transfer the loan to another bank, reassign it, or enforce the security tied to the loan.
He admitted that a lender is legally empowered to dispose of the security in the event of default by the borrower.
Earlier, Obigwe was led in evidence by Dr. Wahab Shittu (SAN), where he told the court that he was a board member and handled transactions with the US EXIM bank for which Union Bank provided a guarantee in the six years he spent with the bank.
Obigwe said, “We also had a second transaction for the two wide-body Aircraft long hubs. A 340-500 and Chemist of Germany Coface of ECGB of UK. The three of them are also shareholders.
The two Boeing were financed by the Export Credit agencies. There was no payment, Union Bank did not commit any money for the guarantee of the 85 per cent.”
The witness further told the court that the two wide-body Aircraft, one flying from Nigeria to New York.
“Unfortunately, since Arik stopped flying to New York, no other Nigeria airline goes directly. Until I left the bank in 2009, all facilities extended to Arik were performing, there was no default.”
Obigwe said that Union Bank stood in as a guarantor to Arik Air to procure five aircraft, three Boeing 737-800 and two Airbus 340-500 aircraft.
He further stated that the three B737-800 were used for local operations, while the wide-body aircraft were deployed to New York in the United States and London in the United Kingdom.
Justice Dada adjourned till June 4, 2025, for continuation of trial.