The Director of the Lagos Zonal Directorate 2 of the Economic and Financial Crimes Commission (EFCC), Bawa Usman Kaltungo, on Monday described the receivership of Arik Air as fraudulent, insisting that the airline was not indebted to Union Bank of Nigeria Plc.

Kaltungo, the fourth prosecution witness in the ongoing trial of former Managing Director of the Asset Management Corporation of Nigeria (AMCON), Ahmed Kuru, and others over an alleged ₦76 billion ($31.5 million) fraud, told the Special Offences Court in Ikeja, Lagos, that the purported bad debt that formed the basis for the receivership did not exist.

The witness, who testified before Justice Mojisola Dada, said his investigation into a petition concerning the airline revealed that the basis for appointing a receiver-manager over Arik Air was faulty.

In a significant development, the court admitted AMCON board resolutions tendered by Kuru’s counsel, Uyi Giwa-Osagie, to challenge the prosecution witness’s assertion that the former managing director had unilaterally approved the receivership.

The documents were admitted despite the prosecution’s objection to their relevance, with the court holding that they emanated from AMCON’s board as a corporate body and had been duly certified in accordance with Section 104 of the Evidence Act.

During cross-examination by Giwa-Osagie, counsel to the second defendant, Kaltungo said he headed the EFCC team that investigated the petition concerning Arik Air.

He told the court that he had informed AMCON’s top management at a meeting that the airline was not indebted to Union Bank and that the appointment of a receiver-manager to take control of the company was defective.

“The foundation for the appointment of a receivership over Arik Air was fraudulent and faulty. There was no bad debt; it does not exist,” the witness said.

The testimony came amid allegations surrounding the handling of Arik Air’s loan obligations, its takeover by AMCON and transactions involving the airline’s assets.

During cross-examination, Kaltungo maintained that Kuru, as AMCON’s managing director and chief executive officer, had extensive powers and had unilaterally sanctioned the appointment of a receiver-manager over Arik Air.

Giwa-Osagie challenged that account by tendering AMCON board resolutions intended to demonstrate that the receivership decision was taken at the corporate level rather than solely by Kuru.

The prosecution objected to the admissibility of the documents, arguing that they were too remote from the issues before the court.

However, Giwa-Osagie submitted that the documents were relevant to determining his client’s culpability in the alleged offences.

He argued that Kuru was not standing trial over the propriety of AMCON’s power to appoint a receiver-manager but over the specific allegations contained in the charge sheet.

The defence counsel maintained that the board resolutions were necessary to establish the circumstances surrounding the decision and challenge the witness’s account of Kuru’s role.

He further argued that the documents were public records that could properly be tendered from the Bar.

In her ruling, Justice Dada upheld the relevance and admissibility of the documents.

The judge held that the documents emanated from AMCON’s board as a corporate body and had been duly certified in accordance with Section 104 of the Evidence Act.

The admission of the resolutions provides the defence with documentary evidence to challenge the prosecution witness’s assertion that Kuru acted unilaterally in approving the receivership.

However, their admission does not, in itself, determine whether the receivership was lawful or resolve the allegations against the defendants.

The EFCC instituted the case following a petition by human rights lawyer Femi Falana, SAN, on behalf of Arik Air’s promoters and shareholders over the airline’s receivership and related transactions.

The defendants are Kuru; Kamilu Alaba Omokide, a former receiver-manager of Arik Air; Captain Roy Ilegbodu, the airline’s chief executive officer; Union Bank of Nigeria Plc; and Super Bravo Limited.

They are facing a six-count charge bordering on conspiracy, stealing and abuse of office.

The prosecution’s case includes allegations concerning the handling of Arik Air’s loan obligations, the transfer of its debt exposure to AMCON and the alleged conversion of ₦4.9 billion belonging to the airline for the use of NG Eagle Limited.

The dispute also raises questions about the exercise of AMCON’s statutory powers and the responsibilities of a receiver-manager appointed to take control of a distressed company.

Section 553(2) of the Companies and Allied Matters Act, 2020, requires a receiver-manager to act in the company’s best interests, including preserving its assets and furthering its business objectives.

Whether the circumstances surrounding Arik Air’s receivership involved any breach of statutory obligations or criminal conduct remains a matter for the court to determine.

The defendants were arraigned on January 20, 2025, and pleaded not guilty to all the charges.

One of the counts reads: “That you, Union Bank of Nigeria Plc, sometime in 2011 or thereabouts, in Lagos, within the jurisdiction of this Honourable Court, with the intention of causing and/or inducing the unwarranted sale of Arik Air loans and bank guarantees with Union Bank, made false statements to the Asset Management Corporation of Nigeria (AMCON) regarding Arik Air Limited’s performing loans, following which you transferred a bogus figure of ₦71,000,000,000.00 (Seventy-One Billion Naira) to AMCON.”

Another count reads: “That you, Ahmed Lawal Kuru, Kamilu Alaba Omokide (as Receiver-Manager of Arik Air Limited), and Captain Roy Ilegbodu (Chief Executive Officer of Arik Air Limited in Receivership), sometime in 2022 or thereabouts, in Lagos, within the jurisdiction of this Honourable Court, fraudulently converted to the use of NG Eagle Limited the total sum of ₦4,900,000,000.00 (Four Billion, Nine Hundred Million Naira only), property of Arik Air Limited.”