The Court of Appeal has affirmed the legality of the Asset Management Corporation of Nigeria (AMCON)’s appointment of a Receiver-Manager over Arik Air, a development that emerged on Thursday during proceedings in the ongoing criminal trial involving former AMCON Managing Director, Ahmed Kuru, and other defendants before the Special Offences Court sitting in Ikeja, Lagos.
The case resumed before Justice Mojisola Dada with the continuation of the cross-examination of the fourth prosecution witness (PW4), Bawa Usman Kaltungo, Director of the Lagos Zonal Directorate 2 of the Economic and Financial Crimes Commission (EFCC).
During proceedings, the court admitted a Certified True Copy (CTC) of a Court of Appeal judgment that set aside an earlier decision relied upon by Arik Air founder, Johnson Arumemi-Ikhide, to argue that AMCON’s receivership of the airline was premature and unlawful.
The appellate court’s ruling reaffirmed the legality of AMCON’s appointment of a Receiver-Manager for Arik Air and validated the powers exercised by the receiver in managing the airline’s affairs.
The EFCC had instituted criminal proceedings against Kuru following a petition filed by human rights lawyer, Femi Falana (SAN), on behalf of Arumemi-Ikhide.
Also standing trial are former Arik Air Receiver-Manager, Kamilu Omokide; former Arik Air CEO, Roy Ilegbodu; Union Bank of Nigeria Plc; and Super Bravo Limited.
Further developments during the hearing revealed that a Federal High Court had earlier upheld the dismantling of one of Arik Air’s aircraft, a matter that forms part of the allegations in the EFCC’s case.
The court admitted into evidence a judgment delivered by Justice Owoeye in Suit No. FHC/L/CS/1141/2024, filed by Captain Samuel Caulcrick and Captain Isiaka Oyeshina Akinfenwa against the EFCC.
The suit arose after the anti-graft agency arrested and detained Caulcrick over the teardown of a Boeing aircraft, allegedly carried out on behalf of the aircraft’s owners.
According to documents tendered before the court, the Federal High Court ruled that the EFCC acted unlawfully in detaining Caulcrick and awarded N5 million in damages against the commission.
The judgment was presented by the defence as evidence contradicting allegations that the dismantling of the aircraft was unlawful because AMCON and its Receiver-Manager lacked the authority to authorise such action.
The court also admitted a board resolution by AMCON authorising and ratifying the establishment, transfer, and allotment of shares in NG Eagle to designated persons, including one of the defendants.
During cross-examination, Kaltungo acknowledged that investigators did not trace any personal financial benefit from the transactions to either Kuru or Ilegbodu.
However, the EFCC witness maintained that approximately N4.9 billion generated from the sale of Arik Air’s assets was diverted to establish NG Eagle, instead of being used to offset the airline’s outstanding debts.
According to Kaltungo, records obtained from Arik Air’s Chief Financial Officer, along with findings from the EFCC investigation, showed that the funds were channelled into the creation of NG Eagle during the period Arik Air was under receivership.
He further testified that although AMCON’s Receiver-Manager assumed operational control of Arik Air, ownership of the airline remained with its shareholders.
“Even under receivership, Arik Air still belongs to the shareholders,” Kaltungo told the court.
The witness explained that a Receiver-Manager has the legal authority to take possession of a company’s assets, preserve and protect them, collect revenues, realise securities on behalf of creditors, and continue managing business operations while recovering secured obligations.
A significant part of the proceedings focused on allegations surrounding the dismantling of a Boeing aircraft identified as 5N-JEA, Serial Number 15058, valued at approximately $31.5 million.
The prosecution alleged that Kuru, Omokide, and Ilegbodu abused their offices by authorising the teardown of the aircraft in a manner detrimental to the economic interests of Arik Air and Nigeria.