A former executive director of Nigeria's Union Bank has testified before a Lagos State Special Offences Court, revealing that he wrote off a USD2.3 million debt owed by Arik Air (W3, Lagos) to his private firm.

Austine Obigwe appeared on May 28 as a prosecution witness in the ongoing trial of former Asset Management Corporation of Nigeria (AMCON) managing director Ahmed Kuru and four others, who face charges of alleged financial misappropriation totalling NGN76 billion naira (USD47.8 million) and USD31.5 million. The charges were brought by the Economic and Financial Crimes Commission (EFCC), and the defendants have pleaded not guilty and have been granted bail, the Nigerian newspaper The Guardian reported.

The Sun newspaper reports that under cross-examination, Obigwe testified that in 2011, two years after his departure from Union Bank, Arik Air owed USD2.3 million to his private company, Staal. He said the debt was never repaid but was written off due to the airline's operational challenges at the time.

"I am not interested in collecting it. I wrote it off when I discovered that Arik Air started having challenges," he said.

Obigwe acknowledged that he had a continuing personal relationship with Arik Air's founder, Johnson Arumemi-Ikhide, but no current formal business ties. He also confirmed acting as a consultant to Arik Air after his tenure at Union Bank.

He recounted his 2009 inspection of Arik Air's then-fleet of 26 aircraft, claiming that Lufthansa had found them airworthy, and testified that during his time at Union Bank, Arik Air was considered financially sound and was meeting its loan obligations.

When asked about a 2009 letter from AMCON regarding a NGN46.11 billion (USD29 million) Arik Air debt, Obigwe said it was not brought to his attention while he was still with the bank, even though he had supervised the airline’s transactions at the time.

He further explained Union Bank’s role in guaranteeing aircraft procurement loans for Arik Air, including for two A340-500s and three B737-800s used on international and domestic routes. According to Obigwe, all facilities extended to Arik Air by Union Bank were performing until his departure in 2009.

The trial is set to resume on June 4.