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The Chairman of House of Representatives Committee on Banking and Currency, Jones Chukwudi Onyereri has disclosed that the House of Representatives of the Federal Republic of Nigeria is currently working at amending the Act establishing the Asset Management Corporation of Nigeria (AMCON).
He said the proposed amendment would further empower and embolden AMCON to go after its debtors especially those who hitherto think they can ride on some loopholes in the Act as is to perpetually engage AMCON in court.
Onyereri made the disclosure in Abuja at a one-day technical session with stakeholders such as the Central Bank of Nigeria (CBN); Nigeria Insurance Deposit Corporation (NDIC) and members of the House Committee on Banking and Currency; AMCON management among others where the challenges inhibiting AMCON from recovering were extensively discussed.
The committee also used the occasion to listen to presentations from the representatives of the CBN, NDIC and legal luminaries among others on how AMCON could function optimally as well as meet its mandate before sunset.
Speaking at the forum, Managing Director/Chief Executive Officer of AMCON, Ahmed Kuru who was frank and blunt at the technical session described his assignment at AMCON as “very difficult,” but said there was need to change the recovery approach at the Corporation with the backing of the National Assembly especially since the remaining crop of AMCON debtors are defiant, recalcitrant and business heavyweights who have the financial wherewithal to repay their debts but have refused to pay by going to court to tie AMCON up.
Kuru said, “We have been doing this for the past seven years and we have realised that what we need now at this time in the life of AMCON is legislative help that would make it possible to recover these debts effectively and efficiently. At AMCON, we believe that the Act establishing the Corporation can be amended as many times as possible by the National Assembly as long as they think it is appropriate to do so in the interest of the Nigerian economy. Given the difficulties we are facing presently, we are of the opinion that the Act establishing AMCON should be amended to reflect our sunset period.
“We are making this suggestion because we have over the years realised that some of our obligors have since established another lifestyle that are different from what brought them to AMCON so the best we can do as a law abiding agency of the government is take them to court. But the wheel of justice grinds slowly in the country so something drastic must be done if we all want AMCON to meet its mandate at sunset. So we suggest that the National Assembly amends the Act establishing AMCON in such a way that the assets of the obligor(s) are automatically transferred to AMCON. From what we know, some of the obligors are working hard to ensure that the cases they have with AMCON in different courts outlive the lifespan of AMCON.”
AMCONs most recent results those for Full Year 2016, shows the company improved its performance, growing funds from its resolution sinking fund (RFF) by 77.8 per cent to N186.3 billion within the year under review; credit losses also improved by 69.8 percent to N19.7 billion.
Similarly, liquidity ratio, defined as the proportion of AMCON’s liquid assets to its total assets, rose by 1.5 percentage points, from 7 per cent in 2015 to 8.5 per cent in 2016. The company’s net operating loss moderated 13.2 per cent from N234 billion in 2015 to N203 billion in 2016.
The National Assembly, which in the first place created AMCON in 2010, Kuru argued must do everything within its constitutional powers to protect the Corporation and pay more attention to AMCON sunset to enable AMCON fully recover the debts from the hard-core obligors who would stop at nothing to frustrate both AMCON, the National Assembly and the Nigerian populace.
Kuru added, “Our recovery assignment is a difficult one and in recent years business has been quite challenging in the country. For that reason, we are sitting on a lot of assets because of the unstable liquidity situation and as you know most of our assets are challenged one way or the other. But we are hopeful that things look up in 2018, meaning that AMCON’s projections too look positive. However, we will continue to be prudent in terms of our spending and running cost generally. But at the end we will continue to insist that to meet our expectation at sunset, we do expect a lot of amendments of our Act as is from the national assembly. Once we have that backing, I assure you that AMCON would meet your expectations.”
Onyereri who chaired the technical session however reassured that the national assembly has also been monitoring the behaviour of AMCON obligors, which he said he was sad to state that some of the obligors are not just enemies of the state but those who do not mean well for both the economic efforts of the present administration and that of the Nigerian nation as a whole. He said that the national assembly would not leave any stone unturned until the AMCON Act is amended to speed up recoveries.
He said, “On February 20, 2018, we also held a public hearing on the AMCON Amendment Bill and during the hearing, we received a lot of inputs from stakeholders, invited guests and AMCON. Because of time limitation and the nature of submissions received at the public hearing, the committee felt that there is need to hold this technical session in order to give everyone involved the opportunity to properly analyse the Bill and give it the proper attention it deserves. This is why we have set-aside today for this technical session-dedication the entire day on this all-important Bill. This is an opportunity to once and for all set AMCON on a proper footing to effectively achieve its mandate.”
AMCON was created in 2010 to assist the Nigerian financial sector achieve stability by buying toxic assets of Eligible Financial Institutions (EFIs); meaning that AMCON was not set up to exist in perpetuity as that would unwittingly create a moral hazard by giving banks in the country the erroneous impression that AMCON would always be there to bail them out.
MICHEAL ANI
