There was a mild drama at the ongoing investigation of alleged diversion of N500 billion intervention funds for aviation and power sectors in the Senate Wednesday.
Chairman of NICON Group of Companies, Mr. Jimoh Ibrahim, flatly denied allegation of diversion of N35 billion out of the N500 billion said to have been released by the Central Bank of Nigeria (CBN) to the moribund Air Nigeria.
The United Bank for Africa (UBA) through which the fund was paid however faulted Ibrahim’s claim.
Mr. Ibrahim who appeared before the Senate Committee on Aviation Wednesday insisted that Air Nigeria, like others, did not receive any fund.
He noted that when he took over Virgin Nigeria, it left a debt of $250 million which he said was offset through assets from his groups of companies.
He said that NICON group, to which Air Nigeria belonged, approached UBA which was also Virgin Nigeria’s banker to secure a loan of N35.5 billion which the bank obtained from the Bank of Industry (BOI).
He added that the airline secured another $40 million loan from the Afrexim Bank, which he claimed had been fully paid back.
Ibrahim noted that he ran the airline for only two years before it was grounded by the regulatory agencies.
He further claimed that he bought the airline from UBA Capital, an arm of the United Bank for Africa and sold back the airline to the agency with all its assets and liabilities.
He said that the defunct Virgin Nigeria was owned by two categories of people which he grouped into Category A and Category B.
Category A, he said, comprised the original owner, Richard Branson, whom he said had all the powers while category B consisted of a group of Nigerian investors who owned 49 per cent of the shares.
He said Branson offered the shares to investors at $1 per one as he listed institutional investors in the company in Nigeria to include Wema Securities.
He explained that with the agreement of all involved, his group of companies bought the airline 100 per cent.
Ibrahim claimed that following a meeting held on the indebtedness of Virgin Nigeria prior to its acquisition, he sought a loan through its banker from UBA which the bank took from the intervention fund.
He insisted that he never had access to the intervention fund neither did he apply to CBN, the custodian of the fund for any loan.
Ibrahim who described as unwarranted an allegation that he obtained N35 billion from BOI, noted that it was not his business to bother where UBA obtained loan for his airline.
He said, “If UBA borrowed from BoI, how that concerns Air Nigeria? Virgin Nigeria didn’t apply to BoI. It gave fund and UBA gave loans to Air Nigeria.”
The Group General Manager of UBA, Samuel Adikamkwu, who represented the bank, reminded Ibrahim of how Air Nigeria wrote an application for N41.5 billion loan.
He said that UBA was only able to secure N35.5 billion from BoI, which repayment he said was extended for a period of 15 years with the intention to free the fund for the airline’s meaningful use.
Adikamkwu said: “He (Ibrahim) kept on saying that he was not part of the intervention from Air Nigeria. He knows that Virgin/Air Nigeria was owing UBA. I showed a letter from your company asking us to apply for this intervention fund.
“And when that money came, you were given a different offer letter elongating your payment period to 15 years and also reducing the rate of interest.
“That freed your working capital, giving you enough room to operate than if you were paying under the old terms. I know it’s a harsh environment but you cannot tell me that the airline did not benefit.”
However, the committee’s co-chairman, Senator Chukwuka Utazi, lamented that the money that was meant to enhance the effectiveness of the airlines was hijacked by banks which he accused of using only the aviation sector to get the fund.
He said: This money didn’t get to any airline but is in coffers of the banks. The airlines are on oxygen. They only used the aviation to get such loans and servicing it while the aviation industry is suffocating. Nigerians have to go to Ghana to board British Airways because it is cheaper from there. When you are on board, you have to send a message to your family that you may see me again but if not, that is it.
“Simple, simple things that we need to put in airports are not there. Nigeria is shortchanged. We are confused but the veil has been lifted. When we are through with our report, this is my discovery of what happened, CBN collected money, it is being serviced but the airlines are not serviced,” he lamented.
Also speaking, a member of the committee, Senator Adesoji Akanbi, regretted that both the CBN and commercial banks have robbed the airlines of the opportunity to enjoy the intervention fund meant for their use.
“The money didn’t get to aviation sector. The airlines have not enjoyed the intervention fund. CBN and banks are not helping matters. It is banks that are owing the sector and not the sector owing banks,” Akanbi said.
