Arik Air In Mess Over N120Billion Fraud Allegations

The Receiver Manager of Arik Air, Kamilu Omokide, has debunked allegations of being involved in N120 billion fraud and investigated by the Economic and Financial Crimes Commission (EFCC).

 

SaharaReporters had reported that the EFCC detained the receiver manager who was appointed by the Assets Management Corporation of Nigeria (AMCON), for Arik Nigeria Limited, Omokide, over financial mismanagement and diversion of monies totalling over N120 billion.

 

Truetells Nigeria learnt that the EFCC detained Omokide alongside one Captain Samuel Caulcrick in connection with the alleged illegal sale and teardown of $41 million CRJ 1000 aircraft which was operated by Arik Air.

 

It was gathered that the detention of the two top executives was sequel to a petition written by human rights lawyer, Femi Falana (SAN), who is also Arik Nigeria Limited’s lawyer.

In a copy of the petition obtained by SaharaReporters on Friday, Falana detailed how there had been humongous financial fraud and the sale of assets reaching over N120 billion.

The petition, addressed to the EFCC chairman, and dated April 27, read in part, “We are Solicitors to Arik Nigeria Limited (hereinafter referred to as “our client”), on whose behalf and specific instructions we write you. Our client operates an airline in the aviation industry by offering air transportation services for passengers and cargo in Nigeria and has been in business since 2006.

 

“In compliance with an ex parte Order of the Federal High Court, Lagos Judicial Division the Asset Management Corporation of Nigeria (AMCON) appointed a receiver manager to manage our client’s assets due to its financial obligation to some banks.

 

“Pursuant to the said ex parte order, the said receiver manager has been overseeing the affairs of our client’s assets pursuant from 2017 to date. In the course of running the airline business the receiver has engaged in financial mismanagement, diversion of monies, sales of assets and misappropriation of funds belonging to Arik Airline.

 

“The details of the financial management, diversion of monies, sale of assets and misappropriation of fund are set out below: 1. Fraudulent contracts awarded: a. Aircraft lease Agreement No. OLY-ARIK/ACMI/A321/202001-21 between Olympus and Arik Air-In-Receivership, executed on November 1,2019 with the following details:

 

“Listed Lease Contracted Aircraft: A321 MSN1015 Reg# SX-ACP; Listed Contracted aircraft delivery date: 01 Feb 2020 and for consideration of the sum of N91,187,500.00 (Ninety-One Million, Eight Hundred and Eighty-Seven Thousand Five Hundred Naira) withdrawn from our client’s (USD) account domiciled at Keystone Bank with account No: 1006835708 on February 11, 2020. There has been no specific performance to the subject matter of the said contract up till date, no service has been carried out, nor was there aircraft or a refund of the consideration furnished for the said contract.

 

“A. Clobek Nigeria Limited with Company’s Registration No. 899094, a real estate firm with its registered office at Abuja purportedly entered into ACMI damp Lease Agreement with Arik Air-In-Receivership in a profit-sharing ratio of Arik 55% and 45% respectively for one Unit aircraft B737-700 MSN 38127 (E1-GVW). However, Clobek Nigeria Limited, is neither registered nor licensed as an aviation services company by the Nigerian Civil Aviation Authority (NCAA), thereby unauthorized and ineligible to provide aviation services.

 

“The said company received questionable payments of N579,902,982.58 for flight operations services from Arik Air-In-Receivership. The Receiver Manager abandoned the several younger Arik Air new-generation aircraft for self-gratifying lease deals and a dubious profit-sharing arrangement. A. The receiver manager executed AIRCRAFT DAMP [A.C.M.I.J LEASE AGREEMENT with Eznis Airways LCC, a Mongolian registered airline lease of one unit Boeing 737-700 Reg No E1 – Engines (the same aircraft purportedly financed by Clobek Nigeria Limited in a profit-sharing arrangement. Some records of payments for Arik Air in Receivership to Eznis are questionable, e.g., multiple security deposits, maintenance, hotel accommodation etc for being duplicated to Clobek and conflicting with aircraft usage.”

 

Reacting to the reports, Omokide in a statement signed by his Public Relations Consultant, Simon Tumba, on Sunday, said the investigation which he said was based on Falana’s petition, was instigated by the majority shareholder in Arik Air, Sir Arumemi Johnson.

According to him, Johnson “owes AMCON about N240 billion as at May 31, 2023”.

“Sir Arumemi Johnson guaranteed and therefore is by law an obligor in respect of this indebtedness and is personally liable for them,” Omokide said on Sunday through Simon Tumba of SY & T Communications Ltd, PR Consultants to Receiver Manager, Arik Air.

He said, “The wild allegations of the misappropriation of N120 billion in the petition are manifestly and patently false and amount to no more than well-concocted lies as part of a deliberate campaign of calumny against the Receiver Manager to abort the ongoing receivership in Arik. Indeed, even on the face of the petition, the claims do not add up to N120 billion. It is made up as a publicity stunt.

 

“The petition intentionally presents a disingenuous and deceptive portrayal of actions which are the typical responsibilities and actions of a Receiver/Manager – falsely implying criminal intent.  The reality is very different: it is instead that the Receiver Manager seeks only to recover for the Nigerian people, monies owed to them by this recalcitrant debtor.

 

“The Receiver Manager has been transparent in his dealings in Arik. The Petition, as has been presented in the media, suggests underhand sales of assets, including a number of CRJ Aircraft.”

 

Omokide further explained that the “aircraft were never owned by Arik. They were simply leased by Arik. The planes were owned by JEM Leasing Limited and JEM Air Limited (both foreign companies) and financed by Export Development Canada (a Crown entity of the Government of Canada) (EDC)”.

 

He continued, “These two foreign companies and EDC were the principal actors in the sale of the said Aircraft. The Receiver Manager has no influence in respect of the exercise of mortgage rights by a mortgagee.

 

“This has been clearly affirmed by EDC who have unequivocally confirmed, including through diplomatic channels, that it was it and the two foreign companies that sold these assets. The accusations against the Receiver Manager are, therefore, cynical and unfounded.

 

“Also, the petition suggests a criminal intent in respect of the JV financing of certain wet lease operations. These JV financings were innovative ways of raising capital due to restrictions on Arik borrowing powers– as it is a company that is technically insolvent and being kept alive only by the magnanimity of AMCON, and Federal aviation agencies.

 

“Furthermore, the petition raises concerns about the teardown of a Boeing 737-700 Aircraft registered as 5N-MJI – which had been abandoned and cannibalised in Malta ever since 2013 by Arik under the then leadership of Sir Johnson, and years before the receivership commenced.”

 

Explaining further, Omokide said, “This was a professionally taken decision on an aircraft that was Beyond Economic Repairs (BER) and stood the chance of being sent to the graveyard by authorities of the relevant airport in Malta.

 

“The pre-teardown valuation of the Aircraft by McLarens (a foremost Aircraft valuation company) valued the Aircraft at USD1.5 million. This was however seized by Lufthansa Technik over Arik’s indebtedness incurred pre-receivership.

 

“All patriotic Nigerians should be deeply concerned by the influence peddling of a recalcitrant debtor to instigate security agencies against a “public-interest” receivership. The desperate resort by Sir Arumemi Johnson to all forms of bullying, “shake down attempts” and other underhand tactics is pitiful.”

 

He continued, “The tactics have been deployed, and are still being deployed, in contempt of existing court orders, and in respect of matters that are currently before various courts, and it is worrisome that the EFCC is being sought to be used to overreach the courts which are seized of these matters.

 

“This should not be allowed to happen or, to the extent that they have already happened, to continue to happen, as it represents forum shopping in respect of issues already before the relevant courts.

 

“The task of recovering monies owed by powerful men who have over time peddled their influence to “game” the system in their favour is tough and sometimes odious. It requires the cooperation of Nigerians and all agencies of government, to achieve.

 

“Despite the contrived petitions and unwarranted allegations against the Receiver Manager, he remains resolute and undeterred in ensuring the successful execution of the receivership over Arik.

 

“The Receiver Manager firmly asserts his unwavering determination to steadfastly defend the delicately constructed integrity he has nurtured, firmly refusing to permit any baseless allegations to besmirch it. He assures that he and all staff of Arik Air Limited (in receiver) will accord EFCC maximum cooperation.”