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One of Aero Contractor's Dash-8 aircraft

Aero silent on Unions’ accusations of managerial fraud, recklessness

Aero Contractors, Nigeria’s oldest airline has been in the eye of the storm for all the wrong reasons in the last few months. From issues ranging from flight cancellations last year to the shameful ladder incident in Bauchi, the airline has been struggling to convince its loyal customers that it is still in the business of flying reliably. Now, with the latest accusations by the aviation unions of rampart and unchecked fraud and mismanagement the airline looks like it is on the verge and its reaction to the accusations is not forth coming. Nigerian Flight Deck examines the accusations and what seems like Aero’s attempt to calm the situation.

Of all challenges that Aero Contractors has gone through nothing seems to have rocked the airline to its foundation more than the accusation that unions in the aviation sub-sector have laid bare bothering on wide scale fraud, mismanagement, high handedness in the last 2 months.

For over two months, unions under the aegis of the Air Transport Services Senior Staff Association of Nigeria (ATSSSAN) and National Union of Air transport Employees (NUATE) have continuously raised allegations ranging from misappropriation, to collusion of board members and management to bankrupt the airline and then the  alleged complicity of the Asset Management Company of Nigeria (AMCON) in the whole matter, the organisation set up to ensure the airline’s survival is also alleged to be part of the plot to wreck the airline.

ATSSSAN and NUATE have called for a forensic audit to be carried out with the intervention of ICPC or the EFCC to look into how tax payers’ money invested in Aero has been embezzled by a few individuals.

The unions also emphasized the need for the present AMCON representative to be investigated alongside the board members of Aero to ensure they return all they have looted in the name of Aero and also to ascertain the true indebtedness of Aero.

One of Aero Contractor's Dash-8 aircraft
One of Aero Contractor’s Dash-8 aircraft

Just on Monday,  the battle took a new twist after the airline placed two of its staff who are Chairmen of chapters of the unions, Messrs Emakpor Ayo-Ife and Adeniyi Adenuga on suspension over what it described as divulging sensitive company information to the media and portraying the company in bad light.

However, the airline did not react to the allegations of massive fraud and embezzlement its management had allegedly committed but opted for an ‘argumentum ad homme’  trying to parry the unions arguments by trying to silence them instead of responding to the allegations.

The airline has reported the unions, who called for the suspended members’ reinstatement for face a massive shutdown to Ministry of Labours and aviation.

Some unionists even allege that the airline does not have any management on ground as things tend to change virtually every day in the airline.

The unions say there is no structure within the airline as there is nobody to take any responsibility for any action taken.

Nigerian flight Deck recalls that in December, during the press conference held at Aero Contractors over the ladder debacle an Accountable Manager and Acting Managing Director, Captain Russell Lee Foon was introduced to journalists and less than a month later without notification another Ag. Managing Director/CEO, Iyene Amapakabo is signing the airlines statements not even the Public Relations department.

Be that as it is, the airline management finally came out with a reaction to the ongoing hurly burly bedevilling Nigeria’s oldest airline, as it has said that it queried the two unions’ chairmen for divulging sensitive company information to the media and portraying the company in bad light.

The company has also come out to say that it has reported the two unions, Air Transport Services Senior Staff Association of Nigeria (ATSSSAN) and National Union of Air transport Employees (NUATE) to the Labour and Productivity Ministry, copying the Aviation ministry, Nigerian Civil Aviation Authority and State Security Service.

In the statement signed by the Ag. Managing Director/CEO, Iyene Amapakabo, the report to these institutions is to look into the matter with the ultimate goal of checking the unwholesome practice of the unions because of its serious safety implications on our operations as an airline. 

Revelation:

The unions wrote an eight paged letter alleging numerous fraudulent practices and embezzlement orchestrated by the management of Aero, the Board of Aero and AMCON representative calling for a forensic Audit to be carried out with the intervention of ICPC or the EFCC to look into how tax payers’ money invested in Aero has been embezzled by a few individuals.

The unions said that AMCON took over the loans of Aero from Eco bank at an undisclosed discounted rate, and made a decision to invest in Aero to turn the fortunes of the airline around, according to them, unfortunately there were a lot of middle men who just wanted to use Aero as a front to siphon tax payers money from AMCON.

The union alleged,” These people who were majorly AMCON senior management staff seconded to the board of Aero with Aero management devised various ways of  siphoning money from AMCON in the name of Aero. Those management staff in Aero who did not cooperate with their plan were either sacked or advised to resign. Some of the ways they orchestrated to siphon tax payers monies out of AMCON in the name aero are listed below.”

“N266M (Two Hundred and Sixty Two Million Naira) was paid in the name Austen Peters & Co and the monies transferred to one Alpine Gates Company for alleged Negotiated settlements fee to AMCON as consultancy fee. On further investigation it was discovered that this money were just being siphoned from aero in the name of consultancy fees and passed back to a beneficiaries in AMCON.”

“$250.000 (Two hundred and fifty thousand dollars) was paid twice in favour of Bayo – Negotiation &Finalization of restructuring with AMCON and was also reflected on our invoices as general vendor for consultancy fees. These monies were taken away by AMCON staff even while the company was undergoing serious cash crunch.”

“AMCON claims to have reinvested almost ten billion Naira in Aero since taking it over sometime in 2011  but this monies have always found their way back to the pockets of private individuals who go abroad to negotiate aircraft lease without any technical experience and even most times over bloated lease rates which being a burden on the company.”

“Over a million dollars was paid to Wall & Ace as legal fees to advice management on industrial dispute which should ordinarily have been settled by it human resource department. Most of these monies were paid in dollars as against the CBN act that prohibits indigenous transactions to be paid in dollars. “

“Recently 9 million dollars was transferred to a company, Embraer for the purchase of aircraft, only for the staff to be told after a few months that the deal has been called off by AMCON and the monies trapped with Embraer. We have no idea how such money could just be lost and yet all still count as Aero indebtedness to AMCON.”

“A lot of proxy companies were open to serve the sole purpose of milking the company dry. One of such firms is Skybourne Logistic created to take over all the employees of aero and manage them at a cost of extra 25%, but these was resisted by the unions which lead to the dismissal off all staff and closing down of the company in march 2013. But the senate and industrial court upturned the decision. “

“Skybourne Logistics was also collecting N980 (Nine Hundred and Eighty Naira) per boarding pass which should ordinarily cost less than N25 (Twenty Five Naira) a piece, this amounts to over 60 Million Naira monthly until the unions fought for the deal to be cancelled and it was reduced to N250 and after much pressure finally to N130 which it is today”

“Another Proxy contract was Greater Washington Logistics which was collecting 70 percent of our total cargo and ancillary revenue from excess and giving us 30 percent but after the unions exposed and fought for it to be reviewed, it was reversed we keep 70 percent while they keep 30 percent.”

“There is also a case where the Cross River State Government paid Four Million dollars to Aero in 2013 to service their Dash-8-200 which they purchased from the Rivers State Government to operate into Obudu Cattle Ranch. This money was shared between Aero management and AMCON representatives in Aero Board. Currently Aero is undertaking the repairs with money made from scheduled services, while those who shared this money walk free.”

That at was just some of the allegation levelled against the management and Board of the airline in collusion with some senior AMCON staff, some others include that the Board paid N262, 500,000. ( two hundred and sixty two million Naira ) to the company secretary Austen Peters from funds received from AMCON as consultancy for negotiated settlements of aero indebtedness to AMCON and was routed through a company called ALPNE gates. This was written as consultancy fee in the books of Aero a going concern and was shared amongst AMCON members of Aero Board the board is fully aware of and till date no explanation nor justification can be made for these fund transferred illegally from Aero.

The union further alleged,” Several Payments where paid to proxy companies submitted by Board members  as consultancy fees, which ends up in the pockets of AMCON members of the board of Aero. The most prominent is several foreign transfer to Jussi Savuoski in dollars and over 100 million to Bayo Negotiations and FIN Exec. These monies went into the pockets of AMCON rep on the board of Aero. “

“Recently the present management was alerted by an Israeli company that we were being over charged on our engine lease.  We pay $75,000 (seventy five thousand dollars) as against $45,000 (forty five thousand dollars) the company quoted. But the chair person has refused and denied the present management from changing to a cheaper leaser or even investigate the issue. “ 

Aero’s reaction: 

All these weighty allegations have only met with suspension of the unionists, a shaky airline and a union breathing down their throats demanding for peace but no managerial clarification of the issue as it has gone on for long enough.

Ag. Managing Director/CEO, Iyene Amapakabo, who only explained why the men where queried and suspended and not the issues they uncovered said:

“In the cause of this protest on 14th December 2015, two of our staff who are also members of the Association (Messrs Emakpor Ayo-Ife and Adeniyi Adenuga) divulged sensitive Company information to the press which is contrary to the Company Policy and had the tendency to portray the company in bad light.”

“In line with this, the HR department was directed by management to initiate disciplinary procedure against two of the company’s employees who are incidentally members of these associations for infringements of company policy. To this end, both employees were issued with queries by the Ag. Head of the company’s Human Resources Department and the responses received from these employees’ pointed to the fact that there was a need for the company to carry out investigation into the matter. “

“In line with the policy of our company and international labour laws, when the need arises for an investigation to be conducted concerning infringements of this nature, the company places the relevant staff on suspension pending the outcome of the investigation in order to forestall the employee from interfering with the investigation process. “

The statement further expatiated that,” To our dismay and embarrassment, immediately the disciplinary procedure was being initiated by the Human Resources department of the company, the Air Transport Services Senior Staff Association of Nigeria (ATSSSAN) and the National Union of Air Transport Employees (NUATE) wrote us letters threatening to disrupt the activities of the company if the disciplinary procedure is not reversed.”

“We find the attitude of these Associations unacceptable and their disposition towards our company in relation to their biased stand regarding the present issue has led the management of our company to conclude that, in future, these Associations will attempt to frustrate our company’s efforts towards maintaining staff discipline if left unchecked and it is in this vein that we officially reported these Associations to the Labour and Productivity Ministry, copying the Aviation ministry, Nigerian Civil Aviation Authority and State Security Service with a plea to look into this matter with the ultimate goal of checking the unwholesome practice of these Associations because of its serious safety implications on our operations as an airline.”

The statement concluded stating that the management of Aero is open to discussions and ideas towards resolving labour disagreements but stated that what is unacceptable is the inability of the Union to follow due process in resolving labour issues.

However, it did not mention a reaction to the allegations and so the war seem to continue as the unions have insisted that they will continue to cry to the high heavens until someone hears them and  probes the  airline and the Asset Management company

About anthony omoh

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I am a Journalist with a passion for developmental stories and nigerianflightdeck.com was born out of passion for reporting the travel, business and aviation sub-sector. This site is an expression of my ideals and creativity as a reporter and my discretion as a publisher. I am extremely content doing this and I am sure when you read my stories you'd understand that I touch people and that's why

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