The Asset Management Corporation of Nigeria on said Arik Air and the other firms belonging to its principal promoter, Johnson Arumemi-Ikhide, was indebted to it to the tune of N263.7bn. This is beside the different amounts owed other creditors and members of staff in the form of salary arrears. AMCON’s management team, that appeared before the Senate Committee on Banking, Insurance and other Financial Institutions in Abuja, alleged that Arik Air broke several business rules and agreements before the takeover.
The Managing Director, AMCON, Mr. Ahmed Kuru, in his presentation, described Arik as a serial delinquent debtor.
He said, “Currently, based on the analysis and the reports that we received from outside, Arik Air is confronted with some of these challenges: they have consistently defaulted in servicing all their loans; they have consistently defaulted in making all the lease payments; they have consistently defaulted in paying even insurance premium; they have failed to meet other service providers’ obligations.
“There is total lack of accountability, because nobody knows what is happening there financial-wise. And they have also accumulated regulatory debts, some of which we couldn’t verify before, but which we now know to be N26.4bn, including $3.3m. These are debts to the NCAA, FAAN, NAMA, etc.”
The AMCON boss also identified poor corporate governance as a major cause of crisis in Arik, as decisions were taken solely by the owner.
“And they have failed to even pay staff salaries. They are owing salaries for periods ranging between five and seven months, depending on the department,” he added.
Kuru stated that despite Arik’s refusal to pay its debts, the airline was making an estimated revenue of N7bn monthly.
“In spite of all the efforts extended to Arik, given its strategic nature in the industry, it either refused or neglected the terms of settlements,” Kuru told the lawmakers.
The Chairman of the committee, Senator Rafiu Ibrahim, in his opening remarks, said the lawmakers were in support of AMCON’s activities.
He said, “I would like to put it on record that from the inception of the eighth Senate, we have made it clear to the nation that we are in a total support of the management team of AMCON, because we saw the huge responsibility on its table.
“I am reiterating that we are in support and that whatever you do within the ambit of the law, not infringing on the fundamental human rights of any citizen of Nigeria, you have the support of the Senate.” The lawmaker, however, said the Senate wanted to know what led to the final decision by AMCON and the corporation’s plan for Arik.
