AMCON Incriminatory List of Arik Indebtedness

Piqued by the unfolding rot still being discovered at Arik Airlines, which was recently taken over by the Federal Government under the auspices of Asset Management Corporation of Nigeria (AMCON), Honourable Justice Idris of the Federal High Court, Lagos, has granted fresh interim injunctive orders in aid of the Receivership of Arik Air based on a motion ex parte filed by AMCON and Mr. Oluseye Opasanya, SAN (the Receiver/Manager of Arik). The injunctive orders, amongst other things again restrained the shareholders and the directors of Arik from interfering with the management of Arik by the Receiver/Manager.

However, upon service of the interim injunctive orders on the erstwhile directors of Arik, they filed an application also asking the court to dismiss the suit filed by AMCON and the Receiver/Manager in aid of the receivership and to discharge the said interim orders. But further Affidavit, which lawyers to AMCON filed in support of the motion on notice sought amongst others an interlocutory injunctive orders to restrain the erstwhile shareholders and the directors of Arik Airlines from interfering with, the promoter and the current management of Arik led by Capt. Roy Ukpebo Ilegbodu, a thorough-bred aviation expert under the receivership of Mr. Opasanya, SAN.

The submission to the court listed a long list of decay, unprofessional practice, huge indebtedness, non-existent records, lack of corporate governance among other vices that bedeviled Arik when it was taken over by the government debt recovery agency.

The document disclosed that the former management of Arik Airlines were basically gambling with the lives of millions of people that fly patronize the airline because it did not care about safety because critical issues such as having a simulator, which ensures that Arik pilots undertake mandatory trainings as required to improve their efficiency were non-existent just as the airline had inadequate equipment to facilitate its operations, which is reflected by the insufficient laptops available at the airports to conduct basic checks.

As a matter of fact, the salaries of the expatriate and local staff of Arik were unpaid since October 2016 and July 2016 respectively while the airline owed premiums on its insurance policy because the previous management of Arik took insurance on a monthly basis instead of annually in accordance with aviation global best practice for the insurance of aviation assets. Indeed, Arik operations would have been grounded indefinitely if AMCON did not intervene as the insurance policy of Arik was to lapse on February 10, 2017. As at that date, Arik owe a total of N418, 893,067.97 in arrears of unpaid premium just as its employees’ health insurance had also expired and as a result, both the pilots and other members of staff of the airline were to halt operations as well.

It has also come to the fore that the airline failed to remit pension contributions of its employees despite making the necessary pension deductions from their salaries for which the National Pension Commission had written to demand over N4billion being the outstanding pension remittance. Aside from that, Arik Arik also owe Lufthansa Technik Group, the company responsible for the maintenance of the airplanes a whopping 31 million Euros just to mention a few.

AMCON took over Arik to underscores government’s decision to instill sanity in the nation’s aviation sector and prevented a major catastrophe that protected and preserved Arik. The takeover would among other objectives enhance the value of Arik, improve customer experience, and sustain the safety, reliable and secure operational history of the airline. Arik was in a precarious situation largely attributable to its heavy financial debt burden, bad corporate governance, erratic operational challenges and other issues, that required immediate intervention in order to guarantee the continued survival of the Airline.

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