Fresh facts have emerged in the conflict of interest between the shareholders of Arik Air and the Asset Management Corporation of Nigeria (AMCON), with the latter showing evidence of failed attempts to return the airline to its founder.

AMCON and Arik Air (in-receivership), which had been accused of barring the major shareholders from access to the airline’s headquarters, showed efforts at an amicable resolution of the difference, but for the yet unresolved payment plan for debt over N240.3 billion, as of May 2022.

Recall that AMCON, the special debt recovery vehicle of the Federal Government, took over Arik Air in February 2017 as part of measures to “save” the airline from “imminent collapse”. AMCON had cited gross mismanagement by the owners of Arik, and debt above N300 billion.

In a recent twist to the development, the Chairman of Arik Air, Johnson Arumemi-Ikide, lately attempted to reclaim the airline’s headquarters following a Federal High Court ruling that faulted AMCON on transparency, transfer of Arik’s asset to float a new airline, and barring of Arumemi-Ikide and co. from the Arik Air facilities.

The Guardian yesterday learnt that the major shareholders of Arik Air, led by Arumemi-Ikide, had on at least two occasions – in 2018 and 2022 – called for amicable settlement of the debt, which were welcome by AMCON and Arik Air (in-receivership).

In a 2018 memo to AMCON, the shareholders had hinted at a ready investor willing to settle Arik’s outstanding. The Management of AMCON agreed (subject to regulatory approvals) to settle the then indebtedness of Arik Air with the payment of the sum of N65 billion to AMCON in full, and the final settlement of AMCON’s debt of N135.3 billion.

Also, payment of the sum of N26 billion to AMCON concerning Zenith Bank Plc’s exposure was taken over in full and final settlement of all debts owed to Zenith Bank Plc. Payment of a sum equivalent to 65 per cent of the debt owed to Access Bank Plc (N7.6 billion) and EcoBank Plc (N5.2 billion), respectively. Furthermore, the condition that the company will bear the cost and expenses incurred post receivership.

It was agreed that, “Upon payment of the debts to AMCON and the banks, the receivership will be terminated and Arik Air Limited returned to its shareholders/owners alongside all documents and securities held by AMCON and the banks”.

According to AMCON, “in response to repeated requests for a proof of funds, (the shareholder) introduced SJ Global as a potential investor. Unfortunately, their purported letter of funds in Citi Bank, Hong Kong, turned out to be spurious and fake. After this, the shareholder of Arik through various emails intimated AMCON about some expected funds from U.S.”

Though AMCON continued to trust and proceeded to issue the offer for settlement, “the shareholders of Arik were unable to perform until the offer expired.”

Again, following a December 2019 letter, the major shareholders of Arik approached AMCON for a meeting to negotiate a discount on the expired offer to pay N65 billion. The Receiver Manager invited them to a meeting with the Management team of AMCON. No further reply was received, though later blamed on the ill health of the Arik founder.

In a May 18, 2022 letter to AMCON, settlement proposals were again made by Arik Air shareholders. This includes the proposal to pay N18.2 billion as full and final payment for both AMCON and Zenith Bank exposure – 80 per cent discount on the sum of N91 billion (being the total of the N65 billion and the N26 billion in our April 11, 2018 offer).

Also, five per cent as a down payment in cash or asset or a combination of both and a balance payment over a 10-year tenure with a two-year moratorium. Balance at zero interest throughout the tenure and a further five per cent discount, if the balance is paid two years earlier.

The shareholders further, “request on AMCON to assist to remove Arik from CBN debtors list and assist to obtain funds for capital injection to rebuild the airline at BOI interest rate.

“AMCON to assist to get concessions from CBN for Arik Air to get access to foreign exchange directly from CBN to repair, refurbish grounded and presently unserviceable aircraft and purchase spares to restock for efficient operations of the Airline.

“AMCON to assist the Airline in discussions with various debtors when and if necessary. Once an agreement is reached, this will be presented to the court as a consent judgment and all cases in courts should be withdrawn by both parties.”

AMCON, however, declined to accede to the proposal “as it does not meet settlement expectations.”

Upon receivership in 2017, AMCON disclosed that “Arik did not have adequate cash available even for a week’s operations. Out of the 30 aircraft on the records of the company, only eight aircraft were on the ground and immediately available for operations.

“The company was heavily indebted to Lufthansa Technic; its long-standing Maintenance Repair Organisation (MRO) and they had withdrawn their services and left Nigeria. They were replaced with Ethiopian Airlines (MRO). These were also being owed at the commencement of the Receivership.

“SAMCO Aircraft Maintenance Limited (SAMCO), a Dutch company responsible for maintaining the CRJs and the Q400s, was owed over EURO2.4 million representing nearly six months of obligations.

“Outstanding salaries owed to indigenous and expatriate staff. The work environment was toxic, with many disgruntled staff due to unpaid salaries. Salaries of the expatriate staff and crew were unpaid. Some since July 2016. Some Nigerian Pilots had not been paid since October 2016. In addition, salaries for other local staff had been outstanding since December 2016.

“Health insurance for the employees had expired and was not renewed. Staff and company pension contributions were unremitted for years.

“Recency training for many pilots necessary to certify pilots for the flight was suspended due to lack of funds. This involves simulator training, available abroad. All training schools were owed and had refused further credits. Thus, pilots were grounded, and many flights could not be properly crewed.

“Hotels housing crew and expatriate staff were not paid. In some cases, rents on the apartments of foreign crew/engineers were outstanding. The company was stranded. Arik was cancelling flights due to its inability to be fuelled on credit or to pay fuellers upfront as there were outstanding payments owed to aviation fuel suppliers.

“Outstanding insurance premium on the aircraft; etc. The insurance policy for the airplane fleet was due to lapse on Friday, 10 February 2017, and the Company was already owing N418.89 million as arrears of unpaid premiums. Lack of maintenance reserves. There was no Arik maintained reserve to overhaul planes.

“Leases on two A330 planes from subsidiaries of Standard Charter were outstanding for over six months. Mercator, the company with the rights and responsibilities for the management of the Passenger Service System and sale of tickets, was owed $2.5 million. They subsequently cut the company off from using the platform.

“Curiously, even the internet subscription offered by Globacom was suspended due to overdue payments. A good number of the aircraft were at different locations and in various states of disuse. Some of the aircraft had been robbed of vital parts.”

In this piece, VICTOR AYENI examines the hardship inflicted on residents of some Ogun State communities bordering Lagos State due to the neglect

For many residents of communities such as Alagbole, Akute, Lambe, Giwa, Agbado and Oke-Aro, in Ogun State, bad road is one challenge they have had to contend with for years, despite the successive governments in the state. The hardship it has foisted on them is easily imagined.

However, one thing central to these communities is that they border Lagos State.

Sunday PUNCH gathered that the Ogun State Government had in 2013 commenced the construction of the road linking the Ogun-Lagos border communities in the Ifo Local Government Area, from Ojodu to Oke-Aro.

To this end, many properties were demolished to pave the way for the dualisation of the road despite resistance from several property owners.

In spite of former Governor Ibikunle Amosun’s lofty promise to complete the road in 24 months, after a decade, the road project has been abandoned leading to a series of road accidents and loss of lives.

When our correspondent visited Alagbole and Lambe communities during the week, it was observed that the road remained in bad shape as only one lane of it was being used by motorists, while the abandoned lane had been filled with deposits of mud.

A resident of Alagbole, Wale Ayanbisi, told Sunday PUNCH that the abandoned lane that the government did not fix had made many motorists to resort to one-way traffic, which has caused accidents.

He said, “The condition of this road is very bad. From Ojodu down to this place is a double lane, but only one of the lanes was fixed by the government, the other was not. So, most of the vehicles avoid taking the abandoned lane and this has led to a series of accidents that have resulted in the loss of lives.

“I have lived here for over four years and there have been cases of pedestrians crossing the road being knocked down because they were not expecting oncoming vehicles. I have seen people’s blood splashed on these roads due to accidents.

“This past month, I was told someone was crushed to death by a car, and afterwards, the task force came around and began to arrest vehicle owners who took one-way traffic and fined them huge sums of money. It was baffling that they didn’t seem so bothered about the state of the road that prompted vehicle owners to resort to taking one-way traffic.”

Ayanbisi added that about a week ago, a commercial motorcyclist told him how he witnessed a collision between a vehicle taking one-way traffic and an oncoming motorcycle.

“This road is actually taking lives and causing much damage to vehicles. My neighbour has complained numerous times about the frequent damage to his car by the bad roads, which had continued to cost him a lot of money to fix.”

A resident of Lambe, Bolaji Gbolahan, recalled that when Amosun was the governor, he embarked on demolition from Akute to Lambe to expand the road but that he reconstructed only one lane out of a two-lane road.

He added, “The project was abandoned. Not only were the owners of the demolished structures not duly compensated, the road was abandoned.

“There was also a bridge that the governor constructed that had even made things rather worse because whenever there is a downpour, the water flowing around it doesn’t move due to the blockage of the water channels. In fact, most drivers prefer to bypass it.

“Prior to the 2023 election when people complained, only a lane of the road was fixed. Since then, vehicles can pass through the road, but whenever it rains there is traffic because the road is not motorable and cars are unable to pass through it due to potholes. A lot of vehicles frequently break down there.”

Another resident of Lambe, Dayo Agbede, told our correspondent that oftentimes he avoided taking the road unless the outing was compulsory, because the road poses risks to commuters.

He added, “It has been like this for as long as I can recall and it seems to be getting worse. The road has big potholes and vehicles have no choice but to pass through them.

“The alternative is for commuters to pass through Abule Egba, Ijaiye going towards Sango side instead of passing through Agbado. I have seen motorcycles having accidents, especially during the rainy season because of the deep, thick mud that fills the road. There are times when tricycles spin and haul occupants into the flood. It’s so traumatic.

“In 2013, they constructed flyovers in Alagbole, Akute, Giwa and another at Agbado. Up till now, only the one at Alagbole has been completed. The rest of these bridges have been abandoned.”

On his part, a commercial driver in the area, Ibrahim Bada, accused the Governor Dapo Abiodun of being non-responsive to the discomfort that residents experience on the road.

He added, “Our governor has not been responsive to our persistent cries about the problems we are facing on this road. During the dry season, the dust here is terrible and during the rainy season, it is flooded.

“During the rainy season, there is heavy traffic and you would see people trekking from Ojodu Berger to Alagbole. The governor should please help us and do something. Our vehicles are getting spoilt on this road.

“This is why the transport fare on this route is higher than it is supposed to be. Commercial drivers and motorcyclists have to add the expenses of fixing their vehicles and bikes due to the bad state of the road to the fares levied on passengers.”

A landlord in Akute, Mr Bayo Okelola, bemoaned how the road had disrupted economic activities in the area and caused people to relocate out of the community.

He said, “The bad road is really affecting economic activities because business owners are also badly affected. Every one of us is affected; even tenants have relocated and refuse to rent houses here knowing the ordeal they will be subjected to.

“The road project has been stalled several times since 2013 and we are tired of talking because we have done everything we know we could do to see things change, but will the government listen?”

However, the governor in a tweet via his official Twitter handle @dabiodunMFR on Monday, said in line with the current realities in the country and as part of efforts to ameliorate the effects of the removal of fuel subsidy on residents of the state, his administration had approved several measures for immediate implementation.

It partly read, “Immediate road infrastructure intervention, with all the local governments working with Community Development Associations and community leaders to submit three roads that require immediate intervention as part of the palliative programmes and support for Micro, Small, and Medium Enterprises through special schemes to boost production capacity and employment generation.”

When contacted, the Chairman of Ifo Local Government, Moji Tawa, told Sunday PUNCH she would not comment on the telephone.

She stated, “Sorry, I won’t give any comment on the phone. I have been quoted a number of times. When I talk like this, I will be quoted and I don’t want to be quoted again, please. When we see, I can talk.”

When contacted, the Special Adviser to the Ogun State Governor on Works and Infrastructure, Ade Akinsanya, said the road construction was ongoing and would be done in phases.

“The construction is ongoing from Sango-Ijoko and also from the Akute area. Construction is being done in phases. You can visit the ongoing work along Sango-Ijoko,” he told our correspondent.

of crucial roads under construction

The job of Bolaji Lawal, the Bank Chief Executive Officer earnestly looking forward to prove his mettle has gotten tougher

From eyeing N13.5Billion payout to boost operations, the financial institution he oversees is now staring at a N72.2 Billion debt.

That is the story of the Chief Executive Officer at Eco Bank.

Lawal officially took up the career defining appointment as Chief Executive Officer at the Bank whose official name is Ecobank Transnational Inc (ETI) on March 1, 2022 after missing out of becoming the Managing Director at Guaranty Trust Bank (GTBank).the previous year.

The Eco Bank job was touted as the perfect opportunity to show his former employers they were wrong in letting him go.

But life has thrown a major stumbling block to what was about to be a quick start with N72.2billion damages in favor of Honeywell Flour Mills Plc (HFMP).

The judgement is a recompense for the huge loss HFMP suffered with ex-parte order Eco Bank secured against its operation while seeking to recover a disputed loan.

The ex-parte order – motions for orders that can be granted without waiting for a response from the other side – freezed the assets of Honeywell Flour Mills as part of efforts by Eco Bank to force recovery of the disputed loan.

The development resulted in significant loss for HFMP, its takeholders as well as the direct and indirect dependants on it operations – including what is termed “incalculable perception on credit worthiness”.

“Eco Bank secured the ex-parte orders from a Federal High court in November 2015, Honeywell regained it assets in 2016 through the Court of Appeal and in 2018, the supreme court upheld that Eco Bank was wrong and granted full access of the assets to Honeywell” we learned.

Added information revealed that the legal condemnation of the move by Eco Bank was such that its counsel was sanctioned for the step.

Interestingly while trying to convince the court to grant the nullified ex-parte orders, Eco Bank reportedly added a sweetener, the bank ” submitted an undertaking to compensate Honeywell Flour Mills for any harm or losses suffered as a result of the ex-parte order, if it is determined that the application was without merit.” we learned.

We gathered that is what has come back to haunt the Bank with Lawal as Chief Executive Officer.

Honeywell simply took Eco Bank and its legal team to their words in the undertaking and approached the court in 2018, after the supreme court win, with a comprehensive compilation of the loss suffered during the period the ex-parte orders was applied on its assets.

“The result is the N72.2 Billion damages awarded on Tuesday (July 18, 2023), though Honeywell sought more than that” SocietyNow.Ng gathered.

Added checks revealed that though Eco Bank has announced the intention to appeal the decision, it has been an unsettling development for the Chief Executive Officer and his team.

We gathered that this is especially because before the supreme court win that gave Eco Bank confidence of getting ₦13.5 billion from Honeywell Flour Mills in the original dispute, the Bankers’ Committee, Sub-committee on Ethics & Professionalism in a decision ratified by the Bankers’ Committee ruled in 2015 that HFMP was not indebted to the Bank.

But the Eco Bank refused to abide by the decision and insisted otherwise until the matter went to open court and entered into the latest chapter.

“And now the new Chief Executive Officer’s job just got tougher with such an addition to all that is already on his plate” we learned.

SocietyNow