How AMCON Mismanaged Arik Air, Depleted Spare Parts Inventory From $150million To Less Than $15million

The shareholders of Arik Air Limited have slammed the Managing Director of the Assets Management Corporation of Nigeria (AMCON), Alhaji Ahmed Kuru, for allegedly using misinformation and deliberate fabrication of falsehood to run the company aground.

The shareholders said the Arik Air under AMCON’s receivership operated only two aircrafts and the Arik Hangar in Lagos was a static display of 14 abandoned new generation aircraft while the rest had “either been cut to pieces, sold, and shipped out of the country.”

The shareholders, however, noted that despite misinformation and falsehood the AMCON had been dishing out, they were ready and willing for “an open dialogue” with the Corporation.

However, they said such a dialogue must be in the presence of the “relevant investigative authorities including such as Police, EFCC, the CBN, the Ministry of Justice and the Ministry of Aviation & Aerospace.”

The shareholders also alleged mismanagement of the airline taken over by AMCON eight years ago, saying contrary to the claim by AMCON that it inherited seven aircraft, there were 17 serviceable aircraft in the airline’s fleet during takeover in 2017.

SaharaReporters reported that there had been a lingering dispute between Arik Air’s shareholders led by Chief Johnson Arumemi and the AMCON.

AMCON’s Managing Director, Ahmed Kuru had recently challenged Arik Air shareholders to present a plan for the repayment of their N240bn debt in order to repossess the airline.

However, in their response to the claim, the Arik Air shareholders dismissed the N240bn claim, saying, “The MD of AMCON should cross check his facts as his agency never filed the sum of N240B, in its claim of the airline’s indebtedness in any court. This is patently false, contradictory, and misleading. We ask him to consult his lawyers so as to spare the public the needless overload of his misinformation.”

In statement made available to SaharaReporters on Friday, titled: “Arik Air Receivership –How Alhaji Ahmed Kuru, MD-AMCON Misinformed and Misled the Government,” the stakeholders regretted that a senior government official like Alhaji Kuru, entrusted with the vital responsibility in the economic affairs of Nigeria will publicly make false and misleading statements in order to justify the monumental damage he led against Arik Air.

“This is a private airline that has proudly flown Nigeria’s flag around the world, while conducting its business constructively and contributing to the economic growth and development of Nigeria.

“While we wish to refrain from media assaults and trials of persons as Alhaji Kuru/AMCON has done repeatedly in the past 6 years, we are beholden with the moral duty to set the records straight, in order to expose the desperate attempt to misinform Nigerians and distort the facts of the monumental destruction of Arik by AMCON and its receiver Manager(s).”

Giving a detailed explanation the stakeholders categorically stated that as at February 9, 2017 when AMCON forced Arik Air into the receivership management of Mr. Oluseye Opasanya (SAN), “the airline was not in default of any of its financial lease and operating loan obligations to any Bank, including the European Credit Agency (ECA)/HSBC facility. Suffice it to state that with the 2010 banking reforms, the CBN directed the conversion of all local bank guarantees of foreign loans from off-balance sheet to on-balance sheet.

“Thus, with this CBN directive, AMCON took over the European Credit Agency (ECA)/HSBC finance facility supported by the local guarantee of Union Bank plc. AMCON renegotiated the facility with Union Bank from single digit to double digit interest rate without involving Arik Air management. This was done arbitrarily without recourse to the fact that Arik Air had been servicing that facility without default for about 3years. A case of shaving a man’s head in his absence.”

On attempt to blame the former Vice President, Yemi Osinbajo, they described it as a disservice to the nation for Alhaji Kuru to attribute Arik forceful Air take-over to the call for intervention by former Vice-President, while acting as President.

The statement added, “It is an incontrovertible fact that Arik had no issues with aircraft lessors and financiers, and neither was any aircraft impounded/seized anywhere in the world until mid – 2019 well into the receivership by AMCON when the lessors were not paid as directed by the CBN letter of 14 March 2017 to all banks.”

According to them, Arik Air under AMCON’s receivership as at today, 20 September 2023 managed by Kamilu Omokide operates only 2 aircrafts.

“The Arik Hangar in Lagos is now a static display of 14 abandoned new generation aircraft while the rest have either been cut to pieces, sold, and shipped out of the country. The spare parts inventory of Arik valued at over USD150M has been significantly depleted to less than USD15M.

“About 80% of domestic routes have been shut down while all west coast, African and intercontinental routes of London, New York, etc have all been shut down completely after 3 months of operation by AMCON in 2017, In addition, over 3000 of Arik highly trained manpower have lost their jobs.”

Arik Air shareholders also faulted AMCON for allegedly attributing the airline’s “forceful take-over to the call for intervention by former Vice-President, Prof. Yemi Osinbajo while acting as President.”

“This is a clear affirmation that it was an unnecessary intervention and an act of meddling in the affairs of a private company. We find it laughable that Alhaji Kuru would attempt to place the responsibility for AMCON’s misadventure in Arik on the former Vice President.”

On The NG Eagle matter, the stakeholders stated “It is regrettable thatMr Kuru was economical with the truth on the issue of NG Eagle. The incorporation documents obtained from the Corporate Affairs Commission’s records shows that NG Eagle was incorporated on 11th July 2019 with an AMCON’s employee, Mr Kamilu Omokide (Arik Receiver Manager) as Shareholder/Director and AMCON as second shareholder with other AMCON employees as Directors in a breach of fiduciary duties to Arik by Kamilu Omikide.

“Alhaji Kuru also did not tell Nigerians that, the registration, establishment, and expenses for the NG Eagle AOC was funded from Arik sales proceeds. The buyer of the NG Eagleis Alhaji Abdul Ahmad, an acquittance of Alhaji Kuru and bureau de change operator selling FX to Arik. This sale transaction of NG Eagle is another breach of public procurement/assets disposal protocols.

“The sale transaction was done in a hush hush arrangement on 20th February 2023, after a date had been reserved for judgment in the matter of Arik Shareholders Vs Kamilu Omokide, AMCON, NG Eagle & Ors at the Federal High Court Lagos. Alhaji Kuru also recently misled the Acting CBN Governor to grant a waiver for the lease and use of the Arik aircraft by the same NG Eagle without informing the Acting Governor of CBN of a subsisting order of court.

“The Federal High Court sitting in Lagos has recently rued that the setup of NG Eagle and transfer of assets of Arik Air to the said NG Eagle is illegal, null, and void. The court also ordered that AMCON, and its Receiver Manager to file audited accounts of Arik Air from 9 February 2017 with the Corporate Affairs Commission within 14 days of its judgement on 31 March 2023. Though AMCON used the courts exparte order to take-over Arik, it disobeyed the same courts when ordered to file audited accounts.”

They, however, noted that AMCON forcefully took over performing loans, must be made to account for its stewardship. “Arik shareholders hereby challenge AMCON’s MD and the banks he claimed are owed by Arik Air to provide proof, records of the indebtedness, default, and demand letters from such banks. It is time to put a stop AMCON’s deception and misinformation to the Government and people of Nigeria.

“It is unfortunate that Alhaji Ahmed Kuru’s 8-year tenure as the Managing Director of AMCON in a national role that should be developmental turned-out to be a season of disruption of businesses In Nigeria.

“It caused heavy job losses, capital and businesses capacity deficits and unprecedented economic setbacks through some unjustifiable receiverships and mismanagement caused by AMCON’s arbitrariness and deliberate misinformation to government.”