Senate C’ttee Clears Jimoh Ibrahim of Alleged Diversion of Aviation Funds

The Joint Senate Committee on Aviation and Anti-corruption yesterday cleared the Chairman of NICON Group of Companies, Mr. Jimoh Ibrahim, of the allegation of diversion of N35 billion of the N500 billion aviation intervention fund released by the Central Bank of Nigeria (CBN) through the defunct Air Nigeria.

Appearing before the committee in the National Assembly yesterday, Ibrahim said his moribund airline, like others, never received a dime from the aviation fund. He said he took over Virgin Nigeria including an outstanding debt of $250 million which he said was offset through all assets from his groups of companies.

According to him, NICON group, to which Air Nigeria belonged, had approached United Bank for Africa (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).

Ibrahim further explained that the airline secured another $40 million loan from the Afrexim Bank, which he said had been fully paid back, adding that he ran the airline for only two years before it was grounded by the regulatory agencies.

Ibrahim further disclosed that he bought the airline from UBA Capital, an arm of the UBA and sold back the airline to the agency with all its assets and liabilities.

He further explained that the defunct Virgin Nigeria was owned by two categories of people which he grouped into Category A and Category B. According to him, category A 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, adding that with the agreement of all, his group of companies bought the airline 100 per cent.

Ibrahim further explained 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 as he insisted that he never had access to the intervention fund neither did he apply to CBN, the custodian of the fund for it.

He described as unwarranted an allegation that he obtained N35 billion from BoI, saying it was not his business to bother where UBA obtained loan for his airline. “If UBA borrowed from BoI, how does that concern Air Nigeria? Virgin Nigeria didn’t apply to BoI. It gave fund and UBA and UBA gave loans to Air Nigeria,” he said.

Responding, UBA reminded Ibrahim how Air Nigeria wrote an application for N41.5 billion loan in 2010, explaining that the bank was only able to secure N35.5 billion from BoI, whose repayment he said was extended for a period of 15 years with the intention to free the fund for the airline’s meaningful use.

The bank however, claimed that there was no cause for alarm as the N35 billion it secured from the intervention fund through BoI was not a bad loan because it is being serviced. But it was slammed by the committee which said its interest was not the loan being serviced but rather banks’ decision to rob the aviation sector of access to the fund.