A former Group Executive Director of Union Bank Plc, Mr. Austine 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 personal company, Staal.
Obigwe was called as a prosecution witness in an ongoing trial involving the former Managing Director of the Asset Management Corporation of Nigeria (AMCON), Mr. Ahmed Kuru, along with four other individuals.
The defendants are facing serious allegations of financial misconduct involving a combined sum of N76 billion and $31.5 million.
The Economic and Financial Crimes Commission (EFCC) charged the defendants with conspiracy, stealing, and abuse of office.
Apart from Kuru, the others charged are Mr. Kamilu Omokide, a former Receiver Manager of Arik Air; Captain Roy Ilegbodu, the CEO of Arik Air; Union Bank of Nigeria Plc; and Super Bravo Limited.
All five pleaded not guilty to the charges. Justice Mojisola Dada granted them bail set at N20 million each, with one surety required per person.
During the court proceedings, Obigwe was questioned under cross-examination. He said that in 2011, two years after his exit from Union Bank, Arik Air owed his company, Staal, $2.3 million. He explained that due to the financial troubles facing the airline at that time, he decided to cancel the debt.
“I am not interested in collecting it. I wrote it off when I discovered that Arik Air started having challenges,” he said.
He further noted that after leaving Union Bank, he worked as a consultant for Arik Air and other companies. When asked about his relationship with Arik’s founder, Sir Johnson Arumemi-Ikhide, Obigwe confirmed that they remained in contact, though he had no official involvement with Arik at present.
Obigwe also shared that in 2009, while still with Union Bank, he took part in an inspection of 26 aircraft owned by Arik. According to him, all the planes were declared airworthy based on evaluations by Lufthansa.
“I had no reason to doubt Lufthansa’s evaluation,” he said, explaining that the assessment was conducted to confirm that Arik’s aircraft fleet was complete and in good shape.
When asked whether Arik Air was meeting its financial obligations at the time, Obigwe said there were no complaints from other banks, and to his knowledge, the airline was fulfilling its loan terms with Union Bank.
A letter dated April 23, 2009, was presented in court. It was said to be from AMCON to Union Bank, detailing a N46.11 billion debt owed by Arik. Obigwe responded that he was never made aware of such correspondence during his time at the bank.
Speaking about Arik’s business conduct while he was still at Union Bank, Obigwe 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.”
He also discussed standard industry procedures when a loan becomes non-performing. According to him, a loan can be reassigned, transferred to another bank, or the lender may take steps to recover the collateral tied to it.
During earlier testimony, Obigwe, led in evidence by Dr. Wahab Shittu, SAN, explained that during his six years at Union Bank, he oversaw major international deals, including partnerships with the U.S. Export-Import Bank.
He mentioned that Union Bank supported Arik in obtaining five aircraft—three Boeing 737-800s for local routes and two Airbus A340-500s for international flights to New York and London.
He added that the wide-body aircraft were financed by export credit agencies, and Union Bank only provided an 85% guarantee without direct financial contribution.
Obigwe concluded that Arik’s loans were performing throughout his tenure and there were no defaults until he left the bank in 2009.
