Connect with us
Advertise With Us

BUSINESS

Senate Seeks Executive Order To Seize AMCON Debtors’ Assets

Published

on


The Chairman Senate Committee on Banking, Insurance and other Financial Institutions, Senator Rafiu Adebayo Ibrahim, has called on the federal government to issue an executive order that would empower the Assets Management Corporation of Nigeria (AMCON) seize assets of its debtors easily.
Ibrahim urged the management of AMCON to collaborate with the Federal Ministry of Finance (FMF), the Central Bank of Nigeria (CBN), and the office of the Attorney General of the Federation to propose that the President of the Federal Republic of Nigeria and Commander-in-Chief of the Armed Forces issues an Executive Order on seizure of assets of persons who are indebted to AMCON.
Speaking at the opening of a 2-day retreat on the AMCON Act Amendment Bill in Lagos, Ibrahim noted that AMCON over the past seven years have done its best to resolve these debts but are still encountering resistance from obligors.
Stating the need for the legislature as a matter of urgency to empower the AMCON to go after recalcitrant obligors, he said “that is the only way AMCON can meet its mandate of achieving the tough mandate for which it was set up in 2010.”
He also called on AMCON to compile and publish the list of all these debtors on major daily newspapers in the country, saying the move would place before Nigerians those who are holding the nation’s economy to ransom since they account for 80 per cent of AMCON’s N4.8trillion obligation.

In a keynote address he delivered at the commencement of the retreat, Sen. Ibrahim said the upper chamber is intent on having serious discussions as soon as possible with major stakeholders such as the CBN, the FMF, the Nigerian Deposit Insurance Corporation (NDIC) and relevant committees from the legislature among others, where issues hindering AMCON from performing optimally including the funding model of AMCON would be discussed to enable the recovery agency of the Federal Republic of Nigeria finish its assignment on a high.
According to him, the Upper Chamber will at this stage bare its fangs by amending the AMCON Act because AMCON has been a key stabilising and re-vitalising tool in the Nigerian financial system and so will be supported by the legislature to enable the Corporation achieve its statutory objectives. He said the legislature therefore supports the proposed plan by AMCON to publish the list of especially the 350 obligors that accounts for nearly 80 per cent of the total huge debt of AMCON.
Earlier in his presentation, managing director and chief executive of AMCON, Mr. Ahmed Kuru reminded the Senate Committee that the ramifications for failure by AMCON to recover its debt, principally owed to the CBN, cannot be quantified as it goes beyond economic cost. He disclosed that AMCON’s total debt obligation of N4.8trillion represents more than 55 per cent of the 2018 national budget. Given the current demands on the federal government therefore, Kuru said he is convinced that it is doubtful that the government can afford to expense AMCON’s debt in the short term.

It was for that reason, AMCON, after seven years of negotiating with the obligors with no commensurate recovery result, has decided to change its strategy, which now pays strict attention to enforcements as a way of compelling especially the recalcitrant obligors to come and pay up their debts. To achieve this however, Kuru said the Corporation will be heavily dependent on the legislature, most especially members of the committee to facilitate the amendment of the AMCON Act since most obligors of AMCON that are politically exposed and business heavyweights now employ different antics in law to tie the Corporation up in courts.
Further highlighting other challenges faced by the Corporation, the AMCON CEO, again said, “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. Our ability to successfully divest these assets, at competitive market price, is severely hampered by several factors including valuation methodology, unperfected title documents, state of the economy, purchasing power. The third challenge is the uncooperative attitudes of select obligors who are either unwilling and/or unable to settle their indebtedness. Such debtors prefer to resort to all manner of diversionary tactics as opposed to dealing with the problem of their indebtedness. It sees most of them are buying time, to where we do not know.”
Kuru also stated that from all indications, AMCON has in the past seven years exhausted the low hanging fruits and have had to roll up sleeves for a drawn out battle because it has become harder to get obligors to settle their debts. Throwing more light on this, the AMCON boss said, “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.”
For that reason, he informed that AMCON had presented the issue with 350 accounts that represent about 80 per cent of AMCON’s current exposure of N3 trillion as at May 31, 2018. AMCON, he said is still grappling with the issues that are multi-faceted, which consequently led the Corporation to reposition its debt recovery approach to focus on enforcement against obligors who are not willing to settle amicably.



Copyright LEADERSHIP.
All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from LEADERSHIP Nigeria Newspapers. Contact: editor@leadership.ng







Advertisement
Comments

MOST POPULAR

Pin It on Pinterest

Share This

Share this post with your friends!