Lagos — A former Group Executive Director of Union Bank Plc, Mr. Austine Obigwe, has disclosed that he voluntarily wrote off a $2.3 million debt owed by Arik Air to his private firm, Staal Nigeria Limited, citing the airline’s operational difficulties at the time. He made this known while testifying before the Lagos State Special Offences Court sitting in Ikeja on Wednesday, May 28, 2025.
Obigwe, who appeared as the second prosecution witness in the high-profile trial of former Managing Director of the Asset Management Corporation of Nigeria (AMCON), Mr. Ahmed Kuru, and four others, stated that the decision to cancel the debt was purely a “commercial judgment” taken in 2011, two years after he had exited Union Bank in 2009.
According to his testimony, the debt originated from a business transaction after his tenure at the bank and was not related to Union Bank’s portfolio. “I took a commercial decision not to pursue the debt. I was no longer interested in recovering it after Arik began experiencing financial turbulence,” Obigwe said during cross-examination.
He confirmed having a personal relationship with Arik Air’s founder, Sir Johnson Arumemi-Ikhide, though he currently holds no formal business or financial interest in the airline.
The trial involves Mr. Kuru; former Receiver Manager for Arik Air, Mr. Kamilu Omokide; Arik’s CEO, Capt. Roy Ilegbodu; Union Bank of Nigeria Plc; and Super Bravo Ltd. They are facing a six-count charge brought by the Economic and Financial Crimes Commission (EFCC), which includes conspiracy, stealing, and abuse of office involving over ₦76 billion and $31.5 million in funds.
All five defendants have pleaded not guilty to the charges. Presiding Judge, Justice Mojisola Dada, granted them bail in the sum of ₦20 million each with one surety in like sum.
Providing further insight into Arik Air’s relationship with Union Bank during his time as a bank executive, Obigwe stated that all loan facilities extended to the airline were performing and without default as of his exit in 2009. He explained that the bank facilitated major financial guarantees for Arik, aiding the acquisition of aircraft through international credit arrangements.
He revealed that Union Bank served as a guarantor in securing five aircraft: three Boeing 737-800 jets for domestic operations and two Airbus A340-500 aircraft for international routes to New York and London. These transactions, he explained, were backed by major global export credit agencies, including Germany’s Coface, the UK’s ECGD, and the U.S. EXIM Bank.
“The guarantees covered 85 percent of the financing, and Union Bank did not make any direct cash commitment for the guarantee,” he clarified. “The financing structure allowed the export credit agencies to carry most of the risk.”
He also recalled participating in a 2009 technical inspection of Arik’s fleet—comprising 26 aircraft—alongside experts from Lufthansa, who certified the planes airworthy. He said he had no reason to doubt Lufthansa’s report, describing the inspection as part of due diligence to evaluate the airline’s operational viability.
During further cross-examination by defence counsel—Mr. Olasupo Shasore, SAN; Mr. Olalekan Ojo, SAN; and Mr. Tayo Oyedepo, SAN—Obigwe stated that he was not aware of any other financial institution raising concerns about Arik’s loan performance during his time at Union Bank.
Responding to questions regarding a letter reportedly sent by AMCON to Union Bank on April 23, 2009, concerning a ₦46.11 billion debt allegedly owed by Arik, Obigwe said he had no knowledge of such correspondence and it never reached him prior to his departure from the bank.
On how financial institutions typically recover debts from defaulting borrowers, Obigwe explained that banks may opt to assign or transfer the non-performing loan to another institution, or invoke legal rights to enforce the security provided. “In cases of default, the bank has the legal right to dispose of the borrower’s collateral to recover its funds,” he stated.
The trial, which has drawn national attention due to the scale of the alleged fraud and the prominent figures involved, continues as the court reviews further testimonies and evidence submitted by the prosecution.
