A former Executive Director of Credits at the Asset Management Corporation of Nigeria (AMCON), Mr Muhammed Jega, told an Ikeja Special Offences Court that Arik’s debt fell under the category of non-performing loans.
Jega stated this while being cross-examined at the ongoing trial of former AMCON Managing Director, Ahmed Kuru, and four others charged with fraud involving N76 billion and $31.5 million.
The other defendants are the former Receiver Manager of Arik Air Ltd., Kamilu Omokide; the airline’s Chief Executive Officer, Roy Ilegbodu; Union Bank; and Super Bravo Ltd.
They are facing a five-count charge bordering on theft, abuse of office, and dishonest acquisition of another’s property.
Union Bank is separately charged with one count of making false statements to a public officer.
At the previous hearing, Jega, the third prosecution witness, had testified that the Arik loan acquired by AMCON during the first phase of the Eligible Bank Asset (EBA) programme, was performing.
However, at Monday’s resumed hearing, he told the court that Arik’s debt to AMCON was later classified as non-performing by relevant regulatory agencies.
The witness made this statement while being cross-examined by the first defence counsel, Prof. Taiwo Osipitan (SAN).
Jega retracted his earlier testimony in which he had stated that AMCON leadership, of which he was a part, purchased Arik’s N85 billion debt from Union Bank and Bank PHB.
He further told the court that AMCON extended an additional N11 billion loan to Arik as working capital.
According to him, in spite of the funds injected by AMCON, along with intervention funds from the Bank of Industry (BOI) which AMCON also guaranteed, Arik was unable to meet its repayment obligations up until the time he left the corporation.
Jega said: “Although I served as executive director of credits and carried out all my actions with the board’s approval, I never saw the loan purchase agreement detailing the number and credit specifics of the Arik loan, particularly from Union Bank.
“According to Union Bank, all the loans were performing. However, by the time I left AMCON in 2015, the Arik loan had become non-performing.
“Arik had been servicing the loan at Union Bank, and the bank reported no defaults.
“There were minutes from a meeting held in London, which I saw, but those minutes were written by Union Bank and sent to AMCON.”
The witness said Union Bank had misled AMCON, and that it was only after the London meeting between the obligor and AMCON management that issues with the loan purchase became apparent.
However, the witness was unable to explain why he failed to escalate the matter to both the AMCON board and the Central Bank of Nigeria.
Jega also admitted that, aside from the guarantees, Arik Air and its promoter had other outstanding loans with AMCON.
While being cross-examined by Mr Olasupo Sasore (SAN), counsel to Kuru, the witness confirmed that the chairman of Arik once approached him to take up a consultancy role with the airline, but the arrangement did not materialise.
“AMCON was already experiencing issues when I was offered the consultancy role, but I was advised to decline it.
“My relationship with all my clients was strictly professional,” he said.
Justice Mojisola Dada adjourned the case until July 1 for continuation of trial.
