The new management of Arik Airlines has appointed KPMG, world-class financial experts to undertake a forensic and diagnostic audit of the finances of the airline, a statement said on Monday, following a government take over on Thursday.
The take over led to discovery that Arik Air owed at least N300 billion debts and had not paid salaries for months. Out of its 28 or 30 aircraft, only about ten were in operation. The airline now needs about N10 billion to survive. KPMG would ascertain the true status of its finances.
According to the statement, the review will among other objectives cover the position of assets and liabilities, and their utilization; recording and utilization of loans, propriety of third party transactions; fraud controls over Procure to Pay (‘PtP’), Agents and Business Partners and Financial Reporting and Arik Airline’s financial position as at January 31, 2017. The report is expected to be delivered within 12 weeks.
“We have hired KPMG to look into the financials of Arik with a tooth comb and advise us with verifiable facts on what went wrong with the airline. We need to do that because the outcome will help us plug the loopholes and stabilise the airline,” the statement added. The whole intention is to identify what went wrong with Arik to enable the new management to bring it back to full operations.
The federal government intervened last Thursday February 9, 2017 in the airline following daunting complaints of huge indebtedness of the airline to various creditors and the frequent interruptions in its operations, and the concern to safety and security