CBN Board Approves AMCON Takeover of Arik Air: EFCC Details Intervention in Court
In a significant development in Nigeria’s aviation and financial sectors, the Central Bank of Nigeria (CBN) formally approved the Asset Management Corporation of Nigeria (AMCON) takeover of Arik Air Ltd., the once dominant local carrier, the Economic and Financial Crimes Commission (EFCC) told a Lagos court. The testimony was delivered on Wednesday as part of an ongoing high-profile fraud trial involving former AMCON officials and Arik Air executives.
Background: Arik Air’s Financial Decline
Arik Air was for years Nigeria’s largest home-based airline, carrying a substantial portion of domestic passenger traffic and connecting major cities across West Africa. However, the airline’s financial condition deteriorated sharply over the past decade, culminating in its collapse and eventual intervention by government agencies.
According to court testimony, the airline was in such a weakened state that its technical partner, Lufthansa, exited Nigeria after being paid cash collaterals by Arik a sign the owners had effectively abandoned operations.
CBN Board Approval: What Happened?
The EFCC’s fourth prosecution witness, Bawa Usman Kaltungo, read out the minutes of a crucial CBN Board of Governors’ meeting held on February 15, 2024. The court heard that the CBN Board, chaired by then-Governor Godwin Emefiele, formally approved AMCON’s takeover of Arik Air due to the airline’s deteriorating finances.
Key points from the minutes included:
- The CBN Board agreed to carry out the Federal Government’s directive on intervening in Arik Air’s affairs.
- The Board authorised working capital support of N1.5 billion to the airline.
- AMCON was instructed to provide regular reports to the CBN Board of Governors.
Discussions also involved senior officials from the Ministries of Finance and Aviation, and the then Acting President, Prof. Yemi Osinbajo, underscoring the high-level nature of the intervention.
Rationale for Intervention
Court testimony emphasised the urgent need for intervention:
- Arik Air was reported to carry approximately 60% of Nigeria’s domestic passengers, making its collapse a systemic risk to the aviation sector.
- Creditor banks reportedly agreed that intervention by CBN and AMCON was necessary to prevent operational shutdowns and asset seizures.
- The Federal Ministry of Finance warned that lenders like Standard Chartered Bank were prepared to seize aircraft for unpaid leases.
There were concerns over the airline’s insurance policy lapsing, threatening grounding of the fleet.
The Ongoing EFCC Trial
The testimony came as part of the EFCC’s prosecution of several high-profile defendants, including:
- Ahmed Kuru, former MD of AMCON
- Kamilu Omokide, former receiver-manager of Arik Air
- Captain Roy Ilegbodu, Arik Air CEO
- Union Bank Ltd and Super Bravo Ltd as corporate co-defendants
- Mohammed Abbas Jega
They face a six-count charge related to alleged conspiracy, stealing, abuse of office and false statements involving the conversion of funds belonging to Arik Air into private or unrelated uses including transactions alleged to benefit other entities.
In addition to detailing the takeover approval, the EFCC witness told the court that funds belonging to Arik Air were allegedly diverted to cover insurance liabilities for another airline Umza Airline without proper authorisation. This allegation has sparked intense legal arguments between prosecution and defence teams.
What This Means for Nigeria’s Aviation Sector
Although the CBN-AMCON intervention was intended to protect a critical national carrier and preserve jobs, the matter has since become a flashpoint in Nigeria’s fight against corruption and corporate mismanagement.
Analysts say the case highlights major governance issues in how distressed national assets are managed and how public institutions interact with private creditors especially when large sums and key economic sectors are at stake.
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