AMCON Takes Over Three More Arumemi-Ikhide’s Firms

AMCON
  • AMCON Takes Over Three More Arumemi-Ikhide’s Firms

The Asset Management Corporation of Nigeria has taken over Rockson Engineering Limited, Ojemai Investment Limited and Ojemai Farms, two firms linked to the former Chairman of Arik Air, Sir Joseph Arumemi-Ikhide.

According to the corporation, Rockson Engineering is indebted to it to the tune of N107bn; Ojemai Investment, N1.9bn; and Ojemai Farms, N8.6bn.

Arik Air’s total debt is also put at about N387bn.

The Head of Corporate Communications, AMCON, Mr. Jude Nwauzor, confirmed the takeover of the firms to one of our correspondents in Lagos on Wednesday.

In an affidavit deposed to by the Receiver Manager of Arik Air, Mr. Oluseye Opasanya, before a Federal High Court in Lagos, the airlines’s total indebtedness was put at N387bn.

According to the affidavit, in addition to about N375bn owed locally, the airline also owes aviation authorities in the West Coast of Africa about $6.5m and Lufthansa Technik Group about €31m.

A breakdown of Arik’s debt within the country showed that the airline owes N418m as arrears of unpaid insurance premium for its airplanes, due on February 10, 2017.

According to the document, a demand letter from the National Pension Commission also showed that the airline failed to remit pension contributions of its employees despite making the necessary deductions from their salaries, and so owes the commission the sum of N4.586bn.

Other debts by the airline are N28.364bn to Zenith Bank Plc; N9.447bn to Access Bank Plc; N632m to Amadeus Marketing Nigeria, an aviation service provider; and N3.8m to Marriot Hotel and Best Western Hotel for the accommodation of its engineers and members of staff.

It was also revealed that the erstwhile management of the airline obtained N2bn to retrofit from AMCON without documentation.

The affidavit alleged that the former management of Arik was basically gambling with the lives of millions of people that patronised the airline, because it did not care about safety as critical issues such as having a simulator to ensure that Arik pilots undertook mandatory training as required to improve their efficiency, were non-existent.

It added that the airline had inadequate equipment to facilitate its operations, which was reflected by the insufficient laptops available at its check-in counters to conduct basic checks.

Nwauzor stated, “The airline uses a minimum of 48 tyres every month, but when AMCON took over, there were no spares.

“As a matter of fact, the salaries of the expatriate and local staff of Arik were unpaid, 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 practices for the insurance of aviation assets.

“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 of that date, Arik owed a total of N418m in arrears of unpaid premium, just as its employees’ health insurance had also expired and as a result, the pilots and other members of staff of the airline were to halt operations as well.”

He added that AMCON took over to underscore the government’s decision to instil sanity in the nation’s aviation sector and prevent a major catastrophe, adding that it underestimated the rot in the airline’s system before the takeover.

According to him, the government has so far spent about N1.5bn since AMCON took over in February to revive the airline, which he said was on the verge of shutting down.

“Even if we had given the former management the next 25 years, they will still not have been able to get out of debt. The National Assembly wanted AMCON to move in, liquidate the company and recover the debts owed. That option is still open to us,” Nwauzor added.

The court document stated that among other shortcomings, Arik operated without any pattern of corporate governance, had a very poor business judgment, poor record keeping and lacked proper accounting and auditing.

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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