An official of the Economic and Financial Crimes Commission (EFCC), Bawa Usman Kaltungo, on Tuesday told a Lagos Special Offences Court sitting in Ikeja that Union Bank of Nigeria Plc merely acted as a guarantor, not a lender, in a foreign loan arrangement involving Arik Air.
Kaltungo, an Assistant Director with the EFCC, gave the testimony while appearing before Justice Mojisola Dada in the ongoing trial of former Managing Director of the Asset Management Corporation of Nigeria, Ahmed Kuru, and others.
“The bank was not the original lender to Arik Air. It only participated in the transaction as a guarantor for foreign lenders,” Kaltungo said under examination by prosecution counsel, Wahab Shittu (SAN).
He alleged that the arrangement was later distorted.
“What started as a guarantee was mischaracterised and the facility was eventually converted into a non-performing loan and transferred to AMCON,” he told the court.
The defendants in the case include former AMCON Managing Director Ahmed Kuru; former receiver-manager of Arik Air, Kamilu Omokide; the airline’s Chief Executive Officer, Roy Ilegbodu; Super Bravo Limited; and Mohammed Abbas Jega.
They are standing trial on charges bordering on conspiracy, stealing, abuse of office, and making false statements over the alleged diversion of Arik Air’s assets valued at ₦76 billion and $31.5 million.
Kaltungo further claimed that Union Bank “illegally converted” what he described as a performing loan into a non-performing loan, despite partial repayments by Arik Air.
“Arik Air had repaid about 38 per cent of the loan before it was classified as non-performing.
“That classification did not reflect the true state of the facility,” he said.
According to him, the reclassification enabled the bank to sell the loan to AMCON for about ₦51 billion.
“The representation was that the airline had defaulted entirely,” he added, “but that was not accurate.”
He also raised concerns about how the proceeds were handled. “Rather than applying the N51bn to offset the outstanding foreign loan, the bank retained the funds, creating a financial imbalance,” Kaltungo told the court.
On the issue of asset disposal, the EFCC official alleged significant gaps in accountability.
“Arik Air’s shares in Zenith Bank were sold for over N2bn. Three aircraft were also disposed of for about $105.7m,” he said.
He continued: “When converted at N360 to a dollar, the aircraft sale should amount to over N32bn. However, only about N9.2bn was applied to the airline’s loan obligations. That leaves over N28bn unaccounted for.”
Kaltungo described the discrepancies as troubling. “These are significant gaps in financial accountability,” he said. “Several transactions were either poorly documented or not supported by verifiable records.”
He also recounted an incident involving missing equipment. “During an inspection, investigators discovered that a brand-new aircraft engine was missing from storage,” he testified. “There was no documentation authorising its removal and no explanation as to its whereabouts.”
Tracing the origin of the transaction, Kaltungo told the court: “The arrangement dates back to around 2010 and began as a guarantee involving Union Bank and foreign lenders. It was later converted into a loan facility.”
He noted inconsistencies in the valuation of collateral. “While the loan exposure was estimated at about N37 bn, the collateral, mainly aircraft, was valued at approximately N75 bn,” he said. “This raises questions about the integrity of the transaction structure.”
Kaltungo also addressed developments following the appointment of a receiver-manager in 2017. “After the receiver-manager was appointed in February 2017, loan servicing deteriorated and eventually stopped,” he stated.
Under cross-examination by defence counsel, Taiwo Osipitan (SAN), the EFCC witness admitted that no forensic audit was conducted.
“I did not consider a forensic audit necessary,” Kaltungo said. “In my view, the transactions were not complex.”
He acknowledged relying on available records despite gaps. “My findings were based on the documents accessible to the investigation,” he added.
Kaltungo also clarified his understanding of receivership. “A receiver does not manage the company,” he said, “but a receiver-manager is empowered to run its affairs.”
However, when shown a court order, he conceded: “Yes, a receiver-manager was duly appointed over Arik Air, and that appointment is recognised by law.”
Further questioning exposed gaps in the investigation. Kaltungo admitted there was “no documented nexus” between some of the defendants in the alleged loan sale to AMCON, and similarly, no established link regarding the sale of Arik Air’s shares in Zenith Bank.
Justice Dada adjourned the matter until May 18 and 19, 2026, for continuation of the hearing.
The PUNCH