Investigations by Nigeria's Economic and Financial Crimes Commission (EFCC) into alleged fraud at Arik Air (W3, Lagos) has revealed that the airline's funds were used to cover insurance premiums at another carrier, UmzaXpress (UY, Abuja), suggesting improper financial flows between the entities.

This is according to a witness for the EFCC who testified at the trial, which resumed in the Lagos Special Offences Court on February 25, following a recess from November 28, 2025, according to a statement issued afterwards by the EFCC.

Facing a six-count charge, including near-conspiracy, stealing, and abuse of office in connection with fraud of NGN76 billion naira (USD56 million) and USD31.5 million at Arik Air (now in receivership) are a former managing director at the Asset Management Corporation of Nigeria (AMCON), Ahmed Kuru; Arik Air's receiver manager Kamilu Alaba Omokide; former CEO Roy Ilegbodu; the Union Bank of Nigeria; and an entity called Super Bravo Ltd.

At the resumed sitting, EFCC investigator Usman Bawa Kaltungo continued his testimony, detailing the commission’s findings on transactions involving Arik Air, AMCON, Union Bank, and foreign lenders.

Kaltungu said investigations revealed that Kuru had diverted funds belonging to the airline to offset insurance liabilities owed by UmzaXpress. He said the first, second, and third defendants were involved and that the sums had not been fully repaid at the time of the probe.

The prosecution tried to submit a certified true copy of the certificate of insurance issued in favour of UmzaExpress as evidence. However, the judge agreed with the defence that the document was not relevant as it was not tied to any of the six counts, and rejected it.

"Too big to fail"

Meanwhile, the Nigerian investigative online newspaper TheNiche reported that Kaltungo also testified that the board of governors of the Central Bank of Nigeria (CBN), the ministries of finance and aviation, and then-acting president Yemi Osinbajo had directed AMCON’s intervention in Arik Air.

He said AMCON opened a loan account for Arik Air in receivership and assigned an account officer to monitor repayments. However, there was no evidence that the loan was serviced, as interest continued to accrue and both the first and second receivers allegedly failed to make payments, prompting the corporation to issue a demand notice.

Reading from CBN board minutes, Kaltungo said members agreed that the bank should implement government directives to intervene in Arik’s affairs, approve NAD1.5 billion (USD1.1 million) in working capital, and require AMCON to provide periodic reports.

According to the minutes, Kuru had warned that Arik, which handled about 60% of Nigeria’s passenger traffic, could collapse within two weeks without intervention. The board was told the airline faced mounting financial pressures, including threats by Standard Chartered Bank to seize two aircraft over unpaid leases, and the imminent renewal of its insurance policy.

Kaltungo said Kuru briefed the board that discussions with creditor banks led to consensus for CBN intervention, while the government considered the airline "too big to fail". He added that Osinbajo directed that immediate steps be taken to rescue the airline.

The trial continues.