Who is afraid of accountability?
Nigerians from all walks of life should applaud The Guardian for its Editorial on May 22, 2023 (page 12). It exposed the shameless abdication of AMCON’s Chief executive, who had no qualms with reducing his role to that of a mere bystander, blaming an organisation’s astronomically dismal performance on everyone else but AMCON itself.
The appointed chief missioner and custodian entrusted with the wherewithal to deliver economic restoration attempted to justify irresponsibility, which is seemingly pervasive of his entire organisation. The poster boy for this monumental failure premised on a lack of genuineness of purpose, nepotism and brazenly unprofessional management of assets, is its appointed Receiver Manager for Arik Air.
According to The Guardian editorial, AMCON cited,” … gross mismanagement by the owners of Arik, and Non-Performing Loans of over N300 billion; inherited in the lot is the sum of N9.6 billion and $2.3 million (totaling N10.85 billion), being five per cent ticket and cargo sales charge that Arik owed to aviation agencies before AMCON took over”. The joke is on AMCON, whose court documents in pursuit of an ex parte order in its case against Arik Air stated a debt amount of N141 billion as against the N300 billion later fabricated by AMCON, and erroneously stated in the editorial of The Guardian. So which is it?
Nevertheless, the debt of N141 billion has always been disputed by Arik Air from the outset. Arik Air categorically claimed it was not in default of its loan obligations to its bankers. The company stated that it did not receive any default letters/notice from any bank. Independent investigations revealed that the contentious loan is a Union Bank Plc local bank guarantee of the European Export Credit Agency facility to finance Airbus aircraft for the airline’s long haul routes.
The unfortunate situation occurred when the Central Bank of Nigeria (CBN) inadvertently introduced a new policy midway into the foreign finance facility, that arbitrarily converted local guarantees of foreign loans from off-balance sheet to on-balance sheet assets. Prior to that, that facility had been religiously serviced up to date before the AMCON takeover at a 2.5 per cent interest to the offshore financier and 0.5 per cent charge as guarantee fees by the local bank. The local guarantee was arbitrarily converted into a local loan at 22 per cent by the CBN/AMCON without recourse to Arik Air management during CBN banking reforms in 2011. As a result of this change in policy, the facility was now converted to a local loan and classified as eligible bank assets by CBN/AMCON. The rest, as they say, is history.
By this change of policy, the facility thus exceeded the single obligor limit of the bank. It should be noted that this same facility had been serviced prior to this change in policy continuously for about 40 months without default. This ill-conceived policy upturned the stable state of affairs and placed Arik Air in a case of double jeopardy.
Records are readily available that Arik Air conveniently liquidated similar facilities with U.S. Exim Bank and the first tranche of facilities granted by the Export Development of Canada totaling about $1b with local Nigerian bank guarantees without default. Therefore, the issues of the company’s commitment to loan obligations from its track records is not in doubt.
Now, AMCON has been in the saddle of managing the airline from February 9, 2017 to date (over six years ) which according to AMCON in The Guardian editorial is a “….down the line hard sell, given the level of rot, debt, and hard-to-recover liquidity, which AMCON pumped in to keep the carrier on life support”. This is not only a euphemism but quite misrepresentative of the receivership’s six years of mismanagement, looting, asset-stripping, and fraud during their stewardship.
Otherwise, how can one describe AMCON’s tenure, which decimated to only two serviceable aircraft, a fleet of 17 serviceable aircraft inherited; and the loss of an expansive intra-Nigerian West Coast and intercontinental network long-haul routes complete with valuable multimillion dollar New York and London Heathrow slots in 2017. Today, about 90 per cent of intra-Nigerian routes have been closed with the West Coast and all international routes shut down.
Arik had sponsored the training of its 3,250 employees through best-in-class organisations like Boeing, Bombardier, Airbus, and others but AMCON management has cut down staff strength to less than 500, while all the stations-offices in Ghana, Sierra Leone, Gambia, Johannesburg, Dakar, Liberia, Angola, London, and New York, among others, have been closed. It’s a testimony to the quality of its team and training that most of its valuable employees left to work with top brands like Qatar, Rwandair, Emirates, Etihad, African World Airways, Ethiopian Air etc, due to dissatisfaction with AMCON management.
It is important to state that Arik Air invested about $12.2 million to assist Nigeria to gain FAA Category 1 status by engaging the world-renowned SH&E Consultancy to provide all technical and training support for both NCAA and Arik staff, including the acquisition of the GE Special Security Detections systems for passenger check-in and profiling for the USA flights. All these were done under the tenure of Dr Harold Demuren as the DG of NCAA, who, ironically, today sits as the Chairman of the AMCON Technical Advisory Board of the same Arik Air they have now plunged into the sad situation that it is in today.
The AMCON takeover in February 2017 was an invasion with two lorry-loads of mobile policemen, reminiscent of “a palace coup” undertaken by any desperate gang with a sole mission of willful dispossession. Its Gestapo tactics had included the arrest of the airline’s Chairman a day earlier, followed by the chasing away of the Managing Director and other Executives from the company headquarters. This fostered the sort of mayhem conducive to a lack of transparency, a takeover without the proper inventory and handover as required by standard practice and the law. Thus, the stage was effectively set for the AMCON receiver manager to script the imaginary creditors’ list and other narratives preparatory to an asset dissipation plot against the airline’s shareholders and AMCON’s liquidation agenda.
That liquidation agenda is frequently promoted in the media by Mr Kamilu Omokide, the receiver manager, who has gone silent after willfully disobeying the orders of the court to render account of his tenure. It seems he is only looking forward to disappearing into the night under the shadow of the AMCON sunset period. It is not surprising therefore that AMCON floated NG Eagle airline to divert assets of Arik Air gratuitously for selfish reasons.
AMCON, inadvertently, admitted its incompetence, lack of capacity and unpreparedness in the takeover of several businesses, especially Arik Air in Nigeria. Several companies have been grounded by AMCON resulting in hundreds of thousands of job losses, lack of confidence of foreign investors in Nigeria exacerbating the dire state of the Nigerian company through the loss of several businesses and jobs.
Why would a messiah mission find it so difficult to render accounts of its handling of Arik Air? There are receiverships in other climes as well. They do work with the owners of the companies, ensure the companies are assisted to recover and are not run aground as done by AMCON. This is only possible when you are truthful, transparent and operate within legal frameworks.
Now that the result of asset stripping, diversion and mismanagement of Arik Air has led to its dismemberment, Nigeria has been deprived of another source of strategic defenses of the naira and viable source of competitive airfares on the international routes.
It becomes clearer that the several amendments of the AMCON act is to facilitate impunity and execution of the schemes and agenda of a certain cabal in the country. Unfortunately, the judiciary acting judiciously has not acceded to the AMCON’s mission of impunity and assault on the economy and deprivation of citizens’ rights.
AMCON, whose receiver Manager defied court orders on Arik Air, is blaming its inability to perform on everyone else’s impunity except its own. It had thrived on abuse of ex parte orders but dares to criticise the judiciary and the legal system in the enforcement of the rights of the citizens in substantive legal actions against it.
Now that the courts have ordered the statutory filing of audited accounts of Arik Air in receivership from inception to date (the past six years), a volcano is about to erupt to reveal a lava of unsurpassed breach of fiduciary responsibilities and the heights of executive mismanagement by a court appointed warden.
It is worrisome that AMCON, a subsidiary of the Central Bank of Nigeria, will be caught up in default of statutory financial reporting and gross breach of corporate governance ethics and practices as the case of Arik Air has exposed. The CBN which is expected to take the lead in best practices! AMCON should hide its head in shame and desist from untenable explanations to justify its incompetence, shenanigans and failure of its receivership team in Arik. It stinks to high heavens. We can all perceive its odious stench clearly from afar.
There is an urgent need by the relevant agencies to undertake a forensic inquiry into all receiverships by AMCON, now that its diversionary trillion-naira claims increasingly appear to be more of a hoax. Its claims should be thoroughly investigated by the new administration in Nigeria to help the country truly determine the reality in order to genuinely rejig the economy. AMCON should be held to account.
While the diversionary storyline trends, these receiver managers have relocated their families and mistresses abroad to expensive schools and residences in London, America and Dubai, while they also acquired posh residences in Ikoyi, Abuja and Magodo. After all, we see and hear them all over the city of London showing off. Who is fooling who? Who is afraid of accountability?
Ifejika and Newton (London) are both ex staffers of Arik Air.