Takeover: Arik shareholders file N20bn suit against FG, Ethiopian Airlines
(businessdayonline)— Following recent reports that the Federal Government is negotiating the takeover of Arik Air with Ethiopian Airlines, shareholders of Arik Air Limited have filed a N20 billion suit against the Federal Government and Ethiopian Airlines.
The suit was instituted by the shareholders of the airline at the Federal High Court, Lagos, against Ethiopian Airlines, the Federal Ministry of Transportation and the Attorney General of the Federation, Abubakar Malami.
The suit was filed on September 6, 2017 by Arik Air’s counsels, Babajide Koku, Chukwuemeka Nwigwe and Ezinne Emedom.
The plaintiff in its statement of claim supported by a 20-paragraph affidavit deposed to by Chris Ndulue, a director with Arik Air, is asking the court to restrain the first and second defendants from further negotiations on its takeover.
The plaintiff avers in their statement that the Asset Management Company of Nigeria (AMCON) took over the airline on February 8, 2017, which was challenged by its management via two suits already pending before the Federal High Court, Lagos.
The plaintiff adds that there are negotiations on the suits numbers FHC/L/CS/827/17 and FHC/L/CS/826/17, which will render the outcome of the suits nugatory.
According to the plaintiff, “The agreement of the second defendant with the first defendant will be wide ranging and intricately affect every aspect of the plaintiff herein, including but not limited to the day to day running technical as well as financial management, which will affect the plaintiff as being the largest domestic and regional airline in Nigeria.”
The plaintiff further avers that the action taken by the first and second defendants will have a negative effect on the country’s image as the plaintiff being the largest airline will be pawned over to another country for management.
The plaintiff notes that the negotiations has caused undue hardship and irreparable damage to the Arik Air brand and ongoing investment discussions as well as unbearable distress to the airline’s shareholders and directors.
Based on this development, the plaintiff has asked the court to declare the negotiations null and void because the Ministry of Transportation has no power to transfer the management of the airline to Ethiopian Airlines, while the suits over the takeover were pending.
The plaintiff also asks the court for an order directing Malami to ensure the investigation of Ethiopian Airlines by the appropriate authorities for inducing and interfering in the administration of justice in the pending suits.
It adds that if found culpable, the airline should be charged for criminal contempt contrary to Section 133 (4) and (9) of the Criminal Code Laws of Lagos State, Cap C17, Laws of Lagos State of Nigeria, 2004.
The plaintiff is also seeking the court for an order compelling the Inspector General of Police to investigate the actions of the second defendant, including a N20 billion punitive damages against the first defendant for inducing or partaking in the interference of the rights of the plaintiff and the administration of justice.
Anietie Okon, former vice president of Arik Air, who spoke on behalf of the stakeholders, accused Ethiopia Airlines of indulging in unethical behaviour and conspiring with some people in the Nigerian government to takeover Arik.
Okon noted that records showed that Ethiopian Airlines had owed huge debts in the past, which with the support of its own government had defrayed and even currently it still owed huge debts.
In the words of Okon, in the aviation industry, debts by airlines is a continuum and it is believed that as long as that airline is flying it owes debts.
According to Okon, debts are staggered and paid for, and in all countries of the world most governments support their airlines, whether flag carriers or national carriers and including the ones who are indebted.