A former Group Executive Director of Union Bank Plc, Mr Austine Obigwe, has revealed in court how he wrote off a $2.3 million debt owed to his private firm, Staal, by Arik Air. Obigwe gave the testimony before the Lagos State Special Offences Court in Ikeja, appearing as a prosecution witness in the high-profile corruption trial involving former Asset Management Corporation of Nigeria (AMCON) boss, Ahmed Kuru, and four others.

Obigwe, who left Union Bank in 2009, explained under cross-examination that the debt arose in 2011 and was later written off due to the airline’s operational difficulties. “I am not interested in collecting it. I wrote it off when I discovered that Arik Air started having challenges”, he told the court, signalling a shift from an earlier stance where he portrayed the airline as financially sound.

Pressed further, Obigwe described Arik Air’s operations as “irresponsible, badly run, and immoral”, even as he admitted having a personal relationship with the airline’s Founder, Sir Johnson Arumemi-Ikhide. He confirmed that the two were Church members and remained close, although no longer in formal business dealings.

The Economic and Financial Crimes Commission (EFCC) has charged Kuru, Arik Air CEO, Captain Roy Ilegbodu, former Receiver Manager Kamilu Omokide, Union Bank of Nigeria Plc, and Super Bravo Limited with conspiracy, stealing, and abuse of office. All five Defendants have pleaded not guilty to the six-count charge.

Justice Mojisola Dada has granted bail to each Defendant in the sum of N20 million, with one surety required in the same amount. The proceedings form part of a broader investigation into AMCON’s handling of toxic assets, particularly as they relate to distressed companies such as Arik Air.

Obigwe also confirmed that he began working as a Consultant for Arik Air shortly after leaving Union Bank. His role included participating in a 2009 inspection of 26 Arik aircrafts, during which Lufthansa certified them airworthy. “I had no reason to doubt Lufthansa’s evaluation”, he said, defending his previous dealings with the airline.

During his tenure at Union Bank, Obigwe claimed Arik Air had not defaulted on its loans, and there were no reported issues from other banks. However, he denied knowledge of a letter dated April 23, 2009, in which AMCON reportedly alerted Union Bank about a N46.11 billion debt owed by the airline, despite overseeing the Arik account at the time.

On managing non-performing loans, Obigwe explained that banks could either restructure, transfer, or enforce collateral on troubled accounts. He also agreed that Union Bank’s eventual decision to transfer Arik’s debt to AMCON was justified, given the Government’s mandate for AMCON to absorb bad loans and stabilise the financial sector.

The court observed that Obigwe’s ongoing consultancy with Arik Air shortly after leaving his senior position at Union Bank could raise conflict-of-interest concerns, particularly since he maintained close ties with the company’s Promoter. The trial is set to resume on June 4, 2025.