The Special Offences Court in Ikeja, Lagos, yesterday heard startling revelations about how Union Bank allegedly sold performing loans as non-performing debts to the Asset Management Corporation of Nigeria (AMCON), in the ongoing criminal trial involving a former AMCON Managing Director, Mr. Ahmed Kuru, and four others over an alleged N76 billion fraud.

The Economic and Financial Crimes Commission (EFCC) arraigned the defendants on a six-count charge bordering on conspiracy, stealing, and abuse of office.

The accused persons include Kuru; the former Receiver Manager of Arik Air Limited, Mr. KamiluOmokide; Arik Air’s Chief Executive Officer, Captain Roy Ilegbodu; Union Bank of Nigeria Plc; and Super Bravo Limited.

All defendants pleaded not guilty, and Justice Mojisola Dada granted them bail in the sum of N20 million each, with one surety in the like sum.

During yesterday’s proceedings, the third prosecution witness, Mr. AbasJega, a former Executive Director of Credit at AMCON, testified before Justice Dada.

He disclosed that a meeting between AMCON and Union Bank executives in London exposed that what Union Bank had transferred to AMCON as a non-performing loan was a performing facility guaranteed by foreign lenders.

“When we took over the loan from Union Bank, we discovered it was not non-performing as claimed. The nature of the facility had changed, and Arik was not amenable to working with us, which complicated AMCON’s relationship with the airline,” Jega said.

He added that upon returning to Nigeria, AMCON demanded that Union Bank refund the payment made for the guarantee on Arik’s behalf.

“It was AMCON that made the payment to the foreign lenders. We told Union Bank to return the money because the facility did not meet the conditions of a non-performing loan.”

Jega also testified that the Chairman of Arik Air became evasive and failed to follow instructions, likely due to the status of the loan.

He added: “I can recall vividly that the Chairman of Arik avoided communication because he believed he should not be answerable, having a non-performing loan with us.”

He emphasised that AMCON did not inject new funds into Arik to solve its operational challenges.

“The loans we recovered were different from the ones we created internally. The money collected back from Union Bank as a guarantee was kept in AMCON’s purse for another purpose,” he added.

Providing context on the aviation sector, Jega explained: “Airlines typically do not take loans to buy aircraft; instead, they arrange financial backing from banks. That’s what Arik did.”

To salvage the situation, Jega said AMCON made efforts by proposing the appointment of a managing director and financial controller for Arik, in a bid to improve oversight and prevent the airline’s collapse. Although Arik initially agreed, they delayed implementation.

Jega noted that under Central Bank of Nigeria (CBN) guidelines, AMCON was only permitted to acquire non-performing loans from banks — a rule allegedly violated in the Union Bank-Arik transaction.

The suit has been adjourned till June 30, 2025 for continuation of trial.