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Ex-Arik directors sue FG, Ethiopian Airlines over takeover reports

Ex-Arik directors sue FG, Ethiopian Airlines over takeover reports
September 10
13:58 2017
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Lawyers representing former directors of Arik Air have filed a N20 billion suit against the federal government and Ethiopian Airlines over recent claims of negotiating the takeover of the airline.

The suit was instituted at the federal high court, Lagos, against Ethiopian Airlines, the federal ministry of transportation and the attorney general of the federation (AGF).

NAN reports that the suit was filed on September 6 by Babajide Koku, Chukwuemeka Nwigwe and Ezinne Emedom.

In February, Arik Air was taken over by the federal government via the Asset Management Corporation of Nigeria (AMCON) due to the company’s huge debt profile, which was over N300 billion.

Speaking at the World Bank/IMF meetings in April, Kemi Adeosun, minister of finance, said the government was speaking with some investors on the sale of the flagship airline.

Esayas WoldeMariam, Ethiopian’s managing director of international services, disclosed that the airline made a bid to the Nigerian government to take over Arik Air, and was waiting for the response of the government.

However, AMCON said it was not aware of the bid claimed to have been made by the Ethiopian government for Arik Air.

In its statement of claim supported by a 20 paragraph affidavit deposed to by Chris Ndulue, a director of Arik Air before the take-over, asked the court to restrain the first and second defendants from further negotiations on its takeover.

The plaintiff noted that AMCON had taken over the airline on February 8 but was challenged by its management via two suits already pending before the court.

According to the plaintiff, the suits numbers are FHC/L/CS/827/17 and FHC/L/CS/826/17, adding that the negotiations by the defendants will render the outcome of the suits irrelevant.

“The plaintiff avers that 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 statement read.

“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 also averred that the negotiations had 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.

It asked the court to declare the negotiations null and void because the ministry of transportation had no power to transfer the management of the airline to Ethiopian Airlines while the suits over the takeover by AMCON are pending.

The plaintiff also asked the court for an order directing the AGF 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 added that if found culpable, the airline should be charged to court 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 also asked the court for an order compelling the inspector general of police (IGP) to investigate the actions of the second defendant.

It further asked the court for N20 billion being punitive damages against the first defendant for inducing or partaking in the interference of the rights of the plaintiff and the administration of justice.

The suit is yet to be assigned to any judge and no date has been fixed for hearing.

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