Lawmakers renew plan to empower AMCON for debt recovery
Tougher times may be fast approaching for the multi-trillion naira debtors of the Asset Management Corporation of Nigeria (AMCON), as the nation’s lawmakers, at the weekend, in Kano State, reiterated their resolve to expedite processes that would see the seizure of assets belonging to them.
President Muhammadu Buhari had recently received a call from the Senate Committee on Banking, Insurance and other Financial Institutions to issue an Executive Order on seizure of assets of persons who are indebted to AMCON.
But barely one week after the call, the Chairman of House of Representatives Committee on Banking and Currency, Sir Jones Chukwudi Onyereri, reiterated that the leadership of the House was ready to collaborate with the Senate for a quick passage of an Amendment Bill to ensure the corporation gets all needed support from the lawmakers to meet its mandate.
Onyereri, in Kano, at a three-day retreat, said given the sunset date of AMCON, which was created by the government for AMCON not to operate in perpetuity, the National Assembly, the executive and the judiciary must ensure that the recovery agency meets its obligation within the expected and acceptable timeframe.
“Earlier this year, we had a public hearing and a technical session on the AMCON amendment Bill. The report on the Bill is out and will soon be presented before the House. This shows our commitment in ensuring that AMCON gets all the support it can get from the National Assembly in carrying out its mandate.
“This Bill is very important and we promise to work with the Senate in ensuring a quick passage of the Bill. As we are all aware, AMCON was not created to exist in perpetuity. There is a sunset date for AMCON and it is expected to have achieved its mandate before the sunset date.
“Therefore, and more importantly, we are here to interact with AMCON to see how we can further help in making sure that AMCON achieves this mandate for the common good of the country,” he said.
He said the lawmakers are happy that AMCON, as an interventionist institution of the Federal Government, especially under its present management, has performed above board, but are worried that the corporation is often constrained by institutional and legal stumbling blocks that have continued to hinder them from achieving optimum results.
According to him, there is need to sensitise the courts on the importance of speedy resolution of AMCON cases and it is a matter of public urgency, as public funds are involved.
The Managing Director/Chief Executive Officer of AMCON, Ahmed Kuru, who reiterated AMCON’s need for support at this particular time, told the lawmakers that the obligors are getting bolder by the day and employing all kinds of tricks to tie AMCON up in court.
He said AMCON today has over 3,000 cases, and counting in different courts across the country with obligors who have the means to pay and are still doing business with other names, but have vehemently refused to pay up their debts.
Presenting the highlight of the corporation’s achievements in the last seven and half years, Kuru said: “AMCON has fully redeemed all Federal Government guaranteed bonds issued to the commercial banks for purchase of non-performing loans0.
The face value of the bonds was N3.7 trillion; the banks became stable and were able to support businesses; AMCON has successfully divested from the three bridge banks.
“AMCON has recorded total recoveries worth N975billion of which cash and assets account for 60 per cent and 40 per cent, respectively. Out of the total number of Eligible Bank Assets acquired, AMCON has fully resolved approximately 4,300, leaving approximately 8,400 and intervened in key sectors of the economy such as aviation and agriculture.
“These achievements came at a significant cost of human and material resources. It seems the energy required to make progress now, is a lot more than what was expended before, both in terms of legal, legislation and human resources. Obligors are smarter, desperate, more aggressive and recalcitrant. This calls for a need to revisit the AMCON Act which governs our operations.
“One of the major areas for amendment is the matter of vesting proprietary interest of all collateral assets acquired by AMCON from commercial banks. The proposed amendment will have retrospective effect. The vesting of proprietary interest of all collateral assets in the resolution vehicle was implemented in Malaysia and was instrumental to their success in recovering debt obligations.
“Our second challenge has to do with the disposal of assets due to the economic downturn. AMCON’s current Assets Under Management (AUM), that is, assets obtained from debt resolution, has a book value of N182 billion, which we are unable to sell.
“It is evident that we have exhausted the low hanging fruits and have to roll up our sleeves for a drawn out battle as it becomes harder to get obligors to settle their debts.
“To clarify, obligors indebted to AMCON for the sum of N1.3 trillion have sued us in various courts in Nigeria raising technicalities to avoid meeting their obligations. This has hampered our recovery efforts and our objective of obtaining the best achievable financial returns on assets acquired from the banks.”