An investigative officer of the Economic and Financial Crimes Commission (EFCC), Bawa Usman Kaltungo, yesterday told a Special Offences Court in Ikeja, Lagos, that Union Bank of Nigeria Plc retained N51 billion belonging to Arik Air instead of using it to settle the airline’s foreign loan obligations.

He also said that no forensic audit had been conducted to determine Arik Air’s true financial status.

Kaltungo disclosed this while testifying before Justice Mojisola Dada in the ongoing trial of former Managing Director of the Asset Management Corporation of Nigeria, Ahmed Kuru, and four others over an alleged N76 billion and $31.5 million fraud.

Kuru is standing trial alongside Kamilu Alaba Omokide, Capt. Roy Ilegbodu, Union Bank, and Super Bravo Limited on a six-count charge bordering on conspiracy, stealing and abuse of office.

Led in evidence-in-chief by prosecution counsel, Dr Wahab Shittu, the EFCC witness told the court that although Arik Air had repaid 38 per cent of its foreign loan before AMCON’s intervention, the bank allegedly failed to discharge its obligations as guarantor.

According to him, Union Bank converted Arik’s N51 billion guarantee and “sat on the funds” rather than remitting them to the foreign creditors.

“Arik has paid 38 per cent of its loan to foreign creditors, but when Union Bank converted the Arik guarantee of N51 billion, they didn’t pay the foreign creditors from the funds.

“Union Bank sat on the N51 billion. With N51 billion, Union Bank was supposed to pay the foreign creditors. Our investigation revealed that Union Bank is still owing Arik 38 per cent of the paid loan,” he added.

The witness further maintained that Union Bank did not directly grant any loan to Arik, explaining that the facility was sourced from foreign institutions, including HSBC, and was serviced by the airline until June 2010.