By Azubuike Ifejika and Bill Newton
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.
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