EFCC alleges Union Bank retained N51 billion in Arik Air loan dispute
EFCC tells Lagos court Union Bank retained about N51 billion from an Arik Air loan sale, as the N76 billion alleged fraud trial involving ex-AMCON MD Ahmed Kuru resumes May 18–19, 2026.
Strong opening: EFCC cites N51 billion retention in Arik Air loan case
An Economic and Financial Crimes Commission (EFCC) assistant director told a Lagos Special Offences Court that Union Bank of Nigeria Plc retained roughly N51 billion realised from a disputed Arik Air loan transaction instead of using the proceeds to offset outstanding foreign loan obligations.
The witness, Bawa Usman Kaltungo, gave the evidence on the second day of testimony in the N76 billion alleged fraud trial that also involves claims related to $31.5 million.
The allegation places Union Bank at the centre of the prosecution’s account of how a foreign-guaranteed facility was restructured, reclassified and sold to the Asset Management Corporation of Nigeria (AMCON).
Details of the witness testimony on the loan sale
Kaltungo, led in evidence by Senior Advocate Wahab Shittu, told Justice Mojisola Dada that Union Bank was not the original lender but acted as guarantor in a foreign loan arrangement that was later converted into a loan and sold to AMCON.
He said the bank reclassified the facility as a non-performing loan (NPL) and transferred it to AMCON on the assertion that Arik Air had defaulted in full, a representation Kaltungo described as misleading.
According to his account, Arik Air had repaid about 38 per cent of the foreign loan prior to the reclassification, yet the bank proceeded with the sale that realised approximately N51 billion.
Asset sales and conversion rates cited by EFCC
The EFCC witness gave a breakdown of other transactions tied to Arik Air’s restructuring, saying the airline’s shares in Zenith Bank were sold for just over N2 billion.
Kaltungo stated that aircraft disposals generated about $105.7 million and that the sale proceeds were converted at N360 to the dollar, producing more than N32 billion.
He told the court that only around N9.2 billion of those proceeds was applied to loan obligations, leaving in excess of N28 billion unaccounted for in the EFCC’s assessment.
Alleged financial discrepancy and collateral valuations
Kaltungo argued that Union Bank’s retention of the N51 billion created a financial discrepancy because the bank remained accountable for repayments already made by Arik Air to the foreign lenders.
He also pointed to a disparity between reported loan exposure and collateral valuation, saying the loan stood at about N37 billion while international assessors valued collateral at roughly N75 billion.
Those differences, the witness suggested, raised questions about the structure and integrity of the financial arrangement that culminated in the loan’s sale to AMCON.
Operational lapses: missing engine and poor record-keeping
During the testimony, the EFCC official described operational deficiencies in Arik Air’s financial management and asset control, including gaps in documentation and inventory tracking.
In a notable revelation, Kaltungo said investigators discovered a brand-new aircraft engine missing from storage with no paperwork authorising its removal and no inventory entry to explain its absence.
He told the court that the lack of records and the poor state of documentation made it difficult to fully trace several transactions linked to asset sales and debt settlements.
Defence response and cross-examination points
Under cross-examination by Professor Taiwo Osipitan (SAN), counsel for the first and third defendants, the witness conceded that no forensic audit was carried out as part of the EFCC probe.
Kaltungo maintained that his conclusions were based on available documents and that the transactions under scrutiny were not sufficiently complex to mandate a forensic examination.
He also acknowledged there was no documented link between the first and second defendants in the loan sale from Union Bank to AMCON or in the sale of Arik Air’s Zenith Bank shares, a point the defence highlighted to challenge aspects of the prosecution’s narrative.
Who is on trial and the charges before the court
The case names former AMCON managing director Ahmed Kuru among the accused, alongside a former receiver-manager of Arik Air, Kamilu Omokide, the airline’s CEO Roy Ilegbodu, Super Bravo Limited and Mohammed Abbas Jega.
They face counts including conspiracy, stealing, abuse of office and making false statements tied to alleged fraudulent conversion of Arik Air assets valued at N76 billion and $31.5 million.
Prosecution counsel and investigators are seeking to establish how assets and loan obligations were managed, transferred and settled through a network of banking and receivership arrangements.
Court timetable and what to expect next
Justice Dada adjourned the matter to May 18 and 19, 2026, for continuation of the hearing, allowing both prosecution and defence further time to call witnesses and probe documents.
The forthcoming sittings are likely to focus on documentary evidence, the chain of authority for the loan sale to AMCON and any further explanations for the alleged shortfalls in proceeds from asset disposals.
Observers say the case could produce follow-up inquiries into bank practices around reclassification of facilities, creditor obligations and the oversight of assets under receivership.
The allegations aired in court underscore the complexities that arise when cross-border loan guarantees, local bank practices and state asset-resolution mechanisms intersect, and the May hearings will be crucial to clarifying how nearly N51 billion and other proceeds were handled in the disputed transactions.
