N76bn fraud: Union Bank sold performing loans to AMCON as non-performing — Witness tells Court

Fresh revelations emerged on Wednesday at the Lagos State Special Offences Court, Ikeja, as a prosecution witness accused Union Bank of selling performing loans as non-performing to the Asset Management Corporation of Nigeria (AMCON).

The disclosure came during the ongoing N76 billion fraud trial of a former AMCON Managing Director, Mr Ahmed Kuru, and four others.

The third prosecution witness, Abas Jega, a former Executive Director of Credit at AMCON, made the startling claim while testifying before Justice Mojisola Dada.

Led in evidence by prosecuting counsel, Dr Wahab Shittu (SAN), Jega described how AMCON discovered the misrepresentation after a meeting with Union Bank executives in London.

“Following the London meeting, it became clear that what Union Bank transferred to AMCON as a loan was, in reality, a guarantee provided to foreign lenders.

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“When we took over the arrangement from Union Bank, we found out that it was not performing. The nature of the facility had changed,” Jega said.

He added that AMCON had paid Union Bank on behalf of Arik Air, based on the understanding that it was acquiring a non-performing loan.

However, it turned out the airline’s obligation was tied to an international guarantee rather than a defaulted loan, the witness stated.

“When we returned to Nigeria, we demanded that Union Bank refund the money we paid for the guarantee.

“AMCON did not give Arik money to resolve their problems; the funds recovered from Union Bank were earmarked for a different purpose entirely,” Jega testified.

He revealed that AMCON attempted to rescue Arik Air from collapse by appointing a managing director and a financial controller, but the airline delayed implementation.

“Though Arik agreed to the proposal, they foot-dragged on execution,” he noted, further explaining that AMCON is legally mandated by the Central Bank of Nigeria to only purchase non-performing loans from financial institutions.

Jega emphasised that in the aviation industry, airlines rarely take direct loans to purchase aircraft. Instead, they secured financial backing through banks, which was the arrangement Arik had.

He also described how Arik’s chairman became evasive, believing he had no obligation to engage with AMCON since the loans were not technically non-performing at the point of sale.

It would be recalled that the Economic and Financial Crimes Commission (EFCC), had accused Kuru and his co-defendants of fraudulently diverting ₦76 billion and $31.5 million from the airline.

Other defendants in the case include Mr Kamilu Omokide, a former receiver manager of Arik Air Limited; Captain Roy Ilegbodu, the airline’s Chief Executive Officer; Union Bank Limited; and Super Bravo Limited.

Justice Dada adjourned further hearing in the trial to June 30, 2025.

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