The Asset Management Corporation(AMCON), and a Receiver/Manager,Omokide Kamilu Alaba appears to be in a mess over the management of Arik Air(in receivership) as human rights and anti corruption lawyer, Femi Falana SAN has petitioned the Economic and Financial Crimes Commission (EFCC) demanding an investigation into N120 billion fraud perpetrated against the airline.
Falana in a petition addressed to the Chairman of EFCC claimed that AMCON and the Receiver Manager perpetrated fraud against Arik Air in so many ways including purchase and lease of aircrafts, service of aircrafts and several other ways.
Below is the full text of the petition dated April 27, 2023:
Economic and Financial Crimes Commission (EFCC),
5, Formella Street
Off Ademola Adetokunbo Crescent,
Wuse, Abuja, FCT.
PETITION AGAINST THE ASSET MANAGEMENT CORPORATION OF NIGERIA (AMCON) AND THE OFFICIAL RECEIVER OF ARIK NIGERIA LIMITED FOR FRAUD, FINANCIAL MISMANAGEMENT, MISAPPROPRIATION OF FUNDS AND SALES OF ASSETS BELONGING TO ARIK NIGERIA LIMITED WORTH OVER THE SUM OF N120,000,000,000.00 (ONE HUNDRED AND TWENTY BILLION NAIRA).
We are Solicitors to Arik Nigeria Limited (hereinafter referred to as “our client”), on whose behalf and specific instructions we write you.
Our client operates an airline in the aviation industry by offering air transportation services for passengers and cargo in Nigeria and has been in business since 2006.
In compliance with an ex parte Order of the Federal High Court, Lagos Judicial Division the Asset Management Corporation of Nigeria (AMCON) appointed a receiver manager to manage our client’s assets due to its financial obligation to some banks.
Pursuant to the said ex parte order, the said receiver manager has been overseeing the affairs of our client’s assets pursuant from 2017 to date. In the course of running the airline business the receiver has engaged in financial mismanagement, diversion of monies, sales of assets and misappropriation of funds belonging to Arik Airline.
The details of the financial management, diversion of monies, sale of assets and misappropriation of fund are set out below:
- Fraudulent contracts awarded:
- Aircraft lease Agreement No. OLY-ARIK/ACMI/A321/202001-21 between Olympus and Arik Air-In-Receivership, executed on November 1,2019 with the following details:
Listed Lease Contracted Aircraft: A321 MSN1015 Reg# SX-ACP
Listed Contracted aircraft delivery date: 01 Feb 2020 and for consideration of the sum of N91,187,500.00 (Ninety-One Million, Eight Hundred and Eighty-Seven Thousand Five Hundred Naira) withdrawn from our client’s (USD) account domiciled at Keystone Bank with account No: 1006835708 on February 11, 2020. There has been no specific performance to the subject matter of the said contract up till date, no service has been carried out, nor was there aircraft or a refund of the consideration furnished for the said contract.
- Clobek Nigeria Limited with Company’s Registration No. 899094, a real estate firm with its registered office at Abuja purportedly entered into ACMI damp Lease Agreement with Arik Air-In-Receivership in a profit-sharing ratio of Arik 55% and 45% respectively for one Unit aircraft B737-700 MSN 38127 (E1-GVW). However, Clobek Nigeria Limited, is neither registered nor licensed as an aviation services company by the Nigerian Civil Aviation Authority (NCAA), thereby unauthorized and ineligible to provide aviation services.
The said company received questionable payments of N579,902,982.58 for flight operations services from Arik Air-In-Receivership. The Receiver Manager abandoned the several younger Arik Air new-generation aircraft for self-gratifying lease deals and a dubious profit-sharing arrangement.
- The receiver manager executed AIRCRAFT DAMP [A.C.M.I.J LEASE AGREEMENT with Eznis Airways LCC, a Mongolian registered airline lease of one unit Boeing 737-700 Reg No E1 – Engines (the same aircraft purportedly financed by Clobek Nigeria Limited in a profit-sharing arrangement. Some records of payments for Arik Air in Receivership to Eznis are questionable, e.g., multiple security deposits, maintenance, hotel accommodation etc for being duplicated to Clobek and conflicting with aircraft usage.
- Galactic Aviation, a Nigerian company purportedly leased 2 units of A320 aircraft A320 MSN 2388 with Registration No. LY-NZL and LY-CCK. The aircraft Reg No LY-NZL operated between April 2022 to Jan 2023 and the other aircraft Reg No: LY-CCK operated between Dec 2022 to March 2023 payments of about N4.3B were released to Galactic Aviation without records of reconciliation of accounts between flights operations and revenue management to determine equitable distribution.
- Israeli Aerospace received from Arik Air in Receivership payments of over N1.IB especially the sum of N309,5000,000 for the repair of aircraft Engine R1505522 since 2018, whereas the purported engine has not been returned to base or released back into operation. This is in addition to another dubious payment for aircraft maintenance in the sum of N71,79,250.00.
- JOHN T Aviation Solutions, a registered Nigerian company and consultancy but not a registered/certified engine service facility by the Nigerian Civil Aviation Authority. (NCAA). John T Solutions received payments of about N507,000,000 (Five Hundred and Seven Million Naira) purportedly expended for engines rental. These payments are questionable and not aligned with service consultancy.
- Global Engines sample payments reveal receipts of over N1.7B without verifiable contracts with suspected payment duplications for engines and also GEM- General Engine Maintenance sample payments reveal receipts of about N464,817,248.66 without verifiable contracts.
- SALE AND TEARDOWN OF AIRCRAFTS
- Sale and Teardown of CRJ900 MSN. 15058 with registration number, 5N-JEA. The last known location of the aircraft was, AlK Hangar Lagos. The value of the said aircraft is estimated at 31,000,000.00 USD, which was destroyed and sold without owner’s (JEM Aviation, UK) consent and regulatory approval.
- Sale and Teardown of aircraft B737-700 MSN 23640 with Registration Number 5N- MJI, the aircraft was estimated at 47,000,000.00(USD) (Forty-Seven Million U.S Dollars) was destroyed and sold without owner’s consent and regulatory approval
In the light of the foregoing, it is very correct to conclude that the receiver manager is duty bound to render account of his stewardship including but not limited to filing the statutory annual returns of the company at the Corporate Affairs Commission but has blatantly refused and/or neglected to fulfill his obligations by not filling the annual returns for the period of six (6) years of its operations.
We have the firm instructions of our client to request you to embark on a full investigation of the criminal diversion of the sum ₦120,000,000,000.00 (One Hundred Twenty Billion Naira) and other financial improprieties arising from fraud, financial mismanagement and misappropriation of funds from the management of Arik Nigeria Limited Assets by the official receiver manager and his cohorts.
Whilst we hope that the issues raised in this letter will be given the required attention, please accept as usual the assurance of our professional regards.
BV FEMI FALANA SAN, FCI Arb
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