‘Patently false’ — Arik Air denies allegations of paying ‘$40m duty waiver’ to customs

Arik Air has denied allegations of paying $40 million duty waivers to the Nigeria Customs Service (NCS) as well as the illegal sales of three aircraft.

A recent report had alleged that the airline abused the duty waiver policy, adding that the firm illegally sold some aircraft and aircraft parts with fake documents.

Responding in a statement on Saturday, the airline said the allegations of misapplication of import duties and illicit sale of aircraft are “without merit and is patently false”.

The airline said the “click-bait of $40 million duty waiver” should be ignored, adding that the duties are paid in naira.

Arik Air (in receivership) said the use of inflated and unsubstantiated sums in newspaper headlines has been part of a strategy to tarnish its reputation.

“Arik is co-operating with the customs in respect of these allegations and they are being provided with comprehensive details of the Aircraft, which will demonstrate clearly that there has been no misdeeds on the part of the receivership,” the statement reads.

“The public is also advised to be wary of those who, if they cannot regain control of Arik, would rather kill it.”

GRANT OF DUTY WAIVERS 

The airline said all duty waivers granted to the firm before the receivership period, under the leadership of Johnson Arumemi-Ikhide, “were not properly documented and handed over to the receivership team as required by law”.

“It was Johnson who pledged various Arik Aircraft and engines to various local and international lenders, possibly in violation of the terms of the waivers,” the airline said.

“Arik’s financial struggles with local and foreign creditors have been well-documented, including enforcement actions against assets pledged to them, which may have enjoyed waivers.

“It is also worth mentioning that as at today, there is a complete duty waiver on commercial planes.”

THE N400 BILLION DEBT TO AMCON

In the statement, Arik Air also admitted that it remains indebted to AMCON to the tune of over N240 billion.

“Together with Rockson and Ojemai Farms, all companies owned by Johnson Arumemi-Ikhide, they are indebted to the tune of over N400 billion to AMCON. Rather than engage in fruitless campaigns of calumny, they should approach AMCON to pay their loans,” the airline added.

Providing further clarifications on the debt, the airline explained that it followed due convention and protocol, aimed at reducing risks for creditors, and consequently, borrowing costs to debtors, through the resulting improved legal certainty.

The aviation firm added that the Cape Town convention intends to give international assurance to the effect that where a debtor defaults in the payment of loans or leases over a plane, the creditor can easily take possession of the plane.

In a separate letter, dated June 24, 2014, Arik noted that an irrevocable de-registration and export request authorisation (IDERA) was issued by the Nigeria Civil Aviation Authority (NCAA) on the CRJ 900 aircraft.

“We assure the public that Arik is not a party to this. It is Johnson Arumemi-Ikhide that has done everything possible to prevent lenders from taking full benefit of their IDERA,” the airline said.

“Arik had paid lease sums directly to EDC in settlement of the loan obligations of JEM Leasing Limited to EDC, maintaining that Arumemi-Ikhide, on behalf of Arik (pre-receivership), had approached the federal government of Nigeria for a waiver of customs duty on the planes, which was granted.”

‘ILLEGAL SALE OF AIRCRAFT AND PARTS IS UNFOUNDED’

Arik also denied claims that it illegally sold aircraft and aircraft parts during the receivership period, describing the report as “baseless and unfounded”.

In June 2023, the airline announced the decision of JEM Leasing Limited, the owners of the CRJ 1000, and its financiers, to sell the aircraft.

Arik said the buyer of the aircraft had also decided to tear it down.

According to the statement, the aircraft — Q-400, CRJ-1000, and CRJ-900 — were acquired on loan by Arumemi-Ikhide through the Export Development Canada (EDC).

“EDC confirmed in a letter dated April 21, 2023, that they sold the two CRJ900 aircraft. The decision to sell was made by EDC, not the receivership team of Arik,” the airline added.

“Regarding the CRJ1000 aircraft, EDC negotiated with a buyer who chose to dismantle it into its constituent parts.”

Arik said the sale of the CRJ aircraft was a lender-led transaction, adding that it airline only exercised its rights to exit an unprofitable lease arrangement.