A former Group Executive Director of Union Bank PLC, Austen Obigwe, told a Lagos court how he wrote off a $2.3 million debt owed by Arik Air to his private firm, Staal Corp.
He made the disclosure while testifying as the second prosecution witness in the trial of former AMCON Managing Director, Ahmed Kuru, and four others.
The Economic and Financial Crimes Commission (EFCC) charged Kuru and others with conspiracy and theft. The case involves allegations of fraud totaling N76 billion and $31.5 million.
Other defendants include:
Kamilu Omokide, former Receiver Manager of Arik Air
Captain Roy Ilegbodu, Arik Air CEO
Union Bank of Nigeria PLC
Super Bravo Limited
All five pleaded not guilty. Justice Mojisola Dada granted each defendant bail of N20 million with one surety.
Obigwe told the court he wrote off the debt in 2011, two years after leaving Union Bank. Arik Air owed his company $2.3 million at the time.
“I’m not interested in collecting it,” he said. “I wrote it off when I discovered Arik Air was having financial challenges.”
He explained that the airline faced serious operational problems. That influenced his decision to forgive the debt.
Obigwe confirmed he worked as a consultant for Arik after leaving Union Bank. He admitted knowing Arik’s founder, Johnson Arumemi-Ikhide, personally. Though he no longer works with the airline, he said he maintains a relationship with Arumemi-Ikhide.
In 2009, Obigwe joined an inspection of 26 aircraft linked to Arik Air. He said Lufthansa certified the planes as airworthy.
“I had no reason to doubt Lufthansa’s evaluation,” he added. The inspection aimed to confirm the airline’s fleet was intact.
He also testified that Arik Air serviced its loans with Union Bank during his tenure. He said he was unaware of any complaints from other banks at the time.
Obigwe denied knowledge of a 2009 letter from AMCON to Union Bank. The letter reportedly mentioned a N46.11 billion debt owed by Arik.
He defended Arik Air’s past operations. “When I was in Union Bank, Arik Air was one of the best companies,” he said.
Obigwe said lenders have several options when a loan turns bad. They can transfer it, reassign it, or enforce the security tied to it. He confirmed that banks are legally allowed to sell such securities when borrowers default.
Next Hearing Set for June 4
The court has adjourned the case until June 4 for the continuation of the trial.
