Alleged N76bn Fraud: Ex-Bank Director Testifies, Says He Wrote Off Arik’s $2.3m Debt
THECONSCIENCE NG reports that A former group executive director of Union Bank PLC, Austen Obigwe, has told the Lagos State Special Offences Court sitting in Ikeja, how he wrote off a $2.3 million debt owed by Arik Air to his private company, Staal Corp.
Obigwe disclosed this while continuing his evidence as the second prosecution witness before Justice Mojisola Dada in the trial of the former managing director of the Asset Management Corporation of Nigeria (AMCON), Ahmed Kuru, and four others, who are standing trial for allegedly defrauding Arik Airline of ₦76 billion and $31.5 million, respectively.
The Economic and Financial Crimes Commission (EFCC) had arraigned the defendants before the court on a six-count charge bordering on conspiracy and stealing by dishonestly taking the property of another.
Apart from Kuru, the other defendants are the former receiver manager of Arik Air Limited, Kamilu Omokide; Arik Air’s Chief Executive Officer, Captain Roy Ilegbodu; Union Bank of Nigeria PLC; and another company, Super Bravo Limited.
They all pleaded not guilty to the charges, and Justice Dada granted them bail in the sum of ₦20 million each, with one surety in like sum.
At the last sitting of the court on March 19, the witness commenced his testimony while being led in evidence by prosecution counsel, Senior Advocate of Nigeria, Wahab Shittu.
He also answered questions under cross-examination from counsel to the first and third defendants, Senior Advocate of Nigeria, Prof. Taiwo Osipitan.
In continuation of his testimony on Wednesday, Obigwe answered questions under cross-examination from three Senior Advocates of Nigeria, Olasupo Shasore (for the second defendant); Olalekan Ojo (for the fourth defendant); and Tayo Oyedepo (for the fifth defendant).
In his testimony, Obigwe told the court that, in 2011, two years after he exited Union Bank, Arik Air was indebted to his company, Staal, for $2.3m.
He stated 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,” Obigwe told the court.
The witness also confirmed that following his exit from Union Bank, he began consultancy engagements with Arik Air and other companies.
When asked whether the founder of Arik Air, Johnson Arumemi-Ikhide, was a personal acquaintance, he responded in the affirmative, noting that although he currently has no formal relationship with the airline, he maintains a relationship with Arumemi-Ikhide.
Obigwe reiterated that in 2009, he participated in an inspection of 26 aircraft “purportedly” belonging to Arik Air.
According to him, the aircraft were found to be airworthy and in good condition, based on assessments provided by Lufthansa.
“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, Obigwe 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 April 23, 2009, allegedly written by AMCON to Union Bank concerning a ₦46.11 billion debt owed by Arik Air, the witness 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, the witness 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, Obigwe responded that the lender may choose to transfer the loan to another bank, reassign it, or enforce the security tied to the loan.
He acknowledged that a lender is legally empowered to dispose of the security in the event of default by the borrower.
The case has been adjourned till June 4 for continuation of trial.
