Tag: AMCON

Managing Director, Asset Management Company of Nigeria (AMCON), Gbenga Alade has expressed concerns that a premature closure of AMCON would put the recovery of N5 trillion debts owed the corporation at risk, lead to a non-performing loans spike and create room for potential bank failures.

Speaking at stakeholders retreat with the Senate Committee on Banking, Insurance, and other Financial Institutions at the weekend, he wondered if any lessons were learned from activities of the past.

He urged the judiciary to expedite the adjudication of AMCON-related cases within the 60 to 90-day timeframe stipulated by the AMCON Act. This, he argues, is crucial to the corporation’s success in recovering billions of naira in outstanding debts.

Alade said AMCON resolved to continue to pursue the recoveries of the debts owed by a few individuals who prefer to remain in courts instead of settling their debts.

 “They believe that with corporation’s sunset date drawing closer, they would walk away free, and the debt will be added to already overloaded domestic debt profile of the nation. We will not allow this to happen because tax-payers monies may be used to repay these debts.

 “As a matter of fact, only about 350 obligors make up more than 70 per cent of the entire debt profile of the corporation. Some of these obligors still fly private jets, get government contracts, and continue to live lavishly in the society.”

Alade remarked that judicial support is crucial in addressing AMCON’s extensive backlog of over 3,000 cases.

Read Also: AMCON, others face contempt charge over family’s eviction

 “We have more than 3,000 cases in various courts around the country; from the court of first instance to the Supreme Court. We have continued to deepen our interaction with the leadership of these courts.”

Alade explained that AMCON’s recovery efforts are increasingly reliant on judicial efficiency. “Our hope is that AMCON cases would be adjudicated within the time limit enshrined in the AMCON Act,” he stated, underscoring that they are not seeking anything beyond what the law stipulates.

He implored the senators to continue to assist in raising awareness among government agencies about the risks associated with engaging with debtors (contractors) who have outstanding liabilities with AMCON.

Despite initial challenges, Alade reported significant progress in recoveries, with AMCON having recovered approximately N2.011 trillion to date. This figure comprises 44 per cent in cash recoveries and 56 per cent from sale of proprietary assets, clawback, and repurchases, among others.

The corporation has successfully disposed of assets valued at around N651 billion since its inception, contributing to job preservation and business rescues across Nigeria.

Alade added that AMCON paid N2,929 trillion to the Central Bank of Nigeria (CBN) between 2013 and 2023, including contributions to the Sinking Fund by other Deposit Banks and AMCON recoveries.

However, AMCON faces a critical juncture, with opinions divided on its future. Some advocate for its winding down, while others argue for its continued existence given the persistent challenges in the financial sector.

Chairman of the Senate Committee on Banking, Insurance, and other Financial Institutions, Senator Adetokunbo Abiru said the theme of the retreat provided an invaluable opportunity for senators to reflect on the critical role that AMCON has played in stabilizing the financial sector and to chart the path forward in view of its sunset clause.

He noted that the Corporation was established as an intervention agency to halt the drift caused by Non-Performing Loans (NPLs) in the banking industry with its adverse impact on savers and the entire economy.

 “Admittedly, the setting up of AMCON has succeeded, to a large extent, in not only stabilizing the banking industry given that the purchase of Eligible Banks Assets (EBA) reinjected the much-needed liquidity into the banking system, but also helped in restoring confidence in the financial sector.”

According to him, “Without any doubt, AMCON was established at a time of considerable turmoil, in the wake of the global financial crisis of 2008, to clean up the books of many ailing banks,” adding that, “It can be said that as a result of AMCON’s interventions, thousands of jobs were saved as a number of banks were rescued from the brink of collapse.”

He noted that as they must accept the reality that AMCON was not designed to be a permanent fixture in the country’s financial landscape.

 “I am aware that the AMCON Amendment Act of 2021 extended the life of AMCON for another five years although it provides that the current tenor may be extended by a resolution of the National Assembly. So, we now stand at a pivotal moment where we must transition beyond AMCON as it is nearly impossible for the Corporation to recover substantial loans by 2026 when it is expected to wind down.

 “Regrettably, despite 14 years of its existence, AMCON still carries massive loans in her portfolio put at circa N5 trillion with a significant portion of the AMCON debt due to the CBN. So, I expect that at this retreat, we should come up with more effective options for dealing with outstanding loans beyond the strategies already adopted, just like the Korea Asset Management Company (KAMCO).

 “It goes without saying that a major challenge remains how to recover the taxpayers’ money used to purchase the EBAs so they can be channeled to critical areas such as education, health, and provision of infrastructure. This is against the backdrop of the fact that many businesses in Nigeria are currently battling economic headwinds, which make debt recovery efforts more difficult now than ever before.”

The Federal High Court in Lagos yesterday fixed Monday for hearing in contempt proceedings initiated by the alleged owners of a disputed property on Victoria Island in Lagos against the Asset Management Corporation of Nigeria (AMCON).

The plaintiffs’ counsel, Chief Bolaji Ayorinde (SAN), told Justice Ambrose Lewis-Allagoa that AMCON evicted his clients’ tenants, despite a pending suit on the subject matter.

Marcellina Jolaoso and Bankole Jolaoso instituted the action as executrix of the estate of the late Mr. Olujimi Jolaoso against Safe Equip Nigeria Limited, AMCON, its Managing Director, Mr. Gbenga Alade, Aloyaius Ezenduka, and Robert Ohuoba.

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Ayorinde alleged that the defendants broke down the doors of the rooms occupied by lawful tenants of the properties while relying on an ex parte order AMCON obtained on October 2, 2024, through its counsel, C. Ezenduka, despite an interlocutory injunction granted the plaintiffs by Justice Lewis-Allagoa on June 25.

The Nation yesterday sighted the Form 48 (Notice of Consequences of Disobedience to Court Order) and Form 49 (Notice to Show Cause Why Order of Attachment Should not be made) filed by the plaintiffs.

AMCON and the executrix of the late Olujimi Jolaoso Estate are in court over the ownership of the property, which was alleged to have been used to secure an unpaid facility from FCMB, a debt bought by AMCON.

The plaintiffs contended that the tenants were evicted while the action between the parties was pending before Justice Lewis-Allagoa.

They also argued that there was an interim order restraining AMCON from tampering with the property pending the suit’s hearing and determination.

They also claimed that the defendants allegedly filed the ex parte application before another judge of the Lagos Division of the Federal High Court, securing an order on October 2 to take over the same property that is subject to the litigation.

The next day, armed with the ex parte order, AMCON and its solicitors, accompanied by the police, stormed the property in contention, allegedly ejecting its occupants and keeping the property under lock and key.

• No hiding place for N5tr obligors
• New deals for ailing power firms

The Asset Management Corporation of Nigeria (AMCON) plans to engage international asset tracers to unmask and seize hidden assets of recalcitrant bad debtors anywhere in the world in a renewed bid to recover huge funds being held by individuals and companies.

About 20 individuals and companies are responsible for more than two-thirds of the outstanding debts of about N5 trillion.

The international asset tracers will be empowered to locate special purpose vehicles (SPVs), nominees, custodians and other various subterranean ways of hiding assets and enforce recovery orders on such hidden assets.

The international asset tracers will complement renewed efforts by the new management of AMCON to track and seize domestic assets of the major debtors. President Bola Tinubu had in February 2024 appointed a new management for AMCON in a major push to resolve the lingering debt crisis.

Managing Director, Asset Management Corporation of Nigeria (AMCON), Mr. Gbenga Alade, yesterday in Lagos outlined the blueprint of the new management to senior media executives, with a promise to ensure transparency, fairness, optimal value and overall wellbeing of the economy in the running of the debt-resolution corporation.

According to him, by engaging international asset tracers and focusing on key sectors, AMCON aims to recover outstanding debts and contribute to the overall economic growth and development of the country.

He said the corporation has been receiving strong supports from all relevant stakeholders including President Tinubu, Central Bank of Nigeria Governor, Federal Ministry of Finance, Attorney General of the Federation, and the National Assembly.

Alade, who resumed formally in April 2024, pointed out that in the first five months, the new management has successfully collected approximately N100 billion from several high-profile debtors and revised the sale of some assets.

He noted that a particular deal that was earlier valued and concluded at a lower value was reopened and closed by the new management at more than 100 per cent, underlining the global experience and diverse expertise of the new management team.

Alade highlighted four key sectors that the new management has chosen to focus on, including oil and gas, power, telecommunications, and aviation.

According to him, AMCON has made significant progress in one of the biggest distribution companies and an abandoned power project in Kaduna.

He noted that a memorandum of understanding has been signed, and operations are expected to commence within the next six months while the corporation is also working on other assets in the power sector, particularly in Aba, as reliable power supply has become a major concern for small, medium, and large-scale enterprises.

Alade emphasised the potential impact of addressing power challenges in Nigeria, stating that some banks with approximately 400 branches across the country spend as much as N500 billion annually on diesel for their generators. He believes that tackling the power sector will significantly improve the overall business environment.

He expressed confidence that resolving issues surrounding assets in the oil and gas sector will boost production, generate more foreign exchange, and create employment opportunities for citizens.

Read Also: Fed Govt unveils plan to revitalize key economic sectors

He said the corporation is also working on assets in the telecommunications sector, aiming to revive dormant assets and bring them back into operation.

According to him, in the aviation sector, the corporation is addressing issues involving two airlines, with the hope of increasing Arik Airline’s fleet from three to eight aircraft by March 2025, which could help reduce airfares in the local aviation industry.

He noted that the Chairman of the House Committee on Finance has pledged to name and shame obligors who have yet to repay their debts at a major stakeholders’ conference that would hold before the end of the year.

He outlined plans to organize a conference where senior officials from the Central Bank of Nigeria (CBN), relevant ministries, banks, and the judiciary will be invited to discuss the challenges posed by non-performing loans in the country.

He assured that AMCON remains committed to its mandate of resolving non-performing loans and stabilizing the Nigerian financial system.

Chairman, House of Representatives Committee on Banking & Ancillary Institutions,  Nwachukwu Eze has asked the Asset Management Corporation of Nigeria (AMCON) to be brutal in recovering N5 trillion loan owed the corporation.

Speaking during a retreat on debt recovery held in Enugu at the weekend, he asked all agencies of the federal government to join the debt recovery drive of AMCON and increased call for all AMCON debt related court rulings to happen within 90 days.

Eze said the recovery of N5 trillion  owed the corporation by a few obligors will increase the revenue of President Bola  Tinubu’s government, and enable the government to deliver the renewed hope Mr President promised Nigerians.

He said the debt recovery agency of the government presently led by Mr Gbenga Alade must be more brutish in the recovery strategy, which should not allow a few obligors get away with the commonwealth of all Nigerians.

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According to a statement by Mr Jude Nwauzor, the Head of Corporate Communications Department of AMCON charged AMCON not to be deterred by the personality or position of any obligor when enforcing on their asset.

The lawmaker added, “The new AMCON management have to face the reality of debt recovery, which is not easy, and must not consider social status of obligors in carrying out enforcement actions. In fact, even if you find my name on the list of AMCON obligors, please come after me. The success of AMCON’s mandate is not the responsibility of one institution alone; it requires the concerted efforts of all stakeholders. This includes the government, financial institutions, the regulatory bodies, security agencies, and indeed the private sector.

“We recognise that the economic landscape is evolving rapidly. Global and domestic challenges require us to reassess our strategies and adapt to new realities. Retreats such as this presents us with another opportunity to reflect on AMCON’s journey so far, to identify areas where we can enhance its capacity, and to align our efforts towards ensuring that the Corporation continues to be a key player in our nation’s economic stability.”

According to the lawmaker, the theme of the retreat, “Revitalising Asset Management for Economic Stability: Exploring Policy Changes and Legislative Support for AMCON,” is not only timely, but also critically important. The task of managing distressed assets is complex, requiring robust policies, innovative approaches, and unwavering legislative backing. Revitalising, in this context, Eze said, “Means more than just improving existing processes; it involves a rethinking of the entire framework within which AMCON operates. It calls for strategic adjustments that will enable AMCON to be more proactive, agile, and effective in its interventions.

 “In this regard, the Committee on Banking and Other Ancillary Institutions is committed to working closely with AMCON and other stakeholders to ensure that our policy framework supports the Corporation’s objectives. We must also consider the broader economic implications of these policies, ensuring that they contribute to sustainable growth and development. As lawmakers, it is our responsibility to provide the legal infrastructure that enables AMCON to fulfill its mandate effectively. This includes reviewing existing laws, proposing new legislative measures, and ensuring that AMCON has the necessary tools to navigate the complexities of asset management.”

Earlier, the Executive Director of Operations Lucky Adaghe who represented the AMCON MD/CEO at the retreat urged the committee to continue to support the Corporation because as the economy tightens up, the assignment of debt recovery has also become even more difficult.

Adaghe said, “The Nigerian economic landscape presents a complex web of challenges for debt recovery, as the country grapples with high inflation, and currency fluctuations. The current economic reforms such as the removal of fuel subsidy, foreign currency exchange unification etc. aimed at diversifying the economy and promoting growth are expected to positively impact debt recovery.”

 “Initiatives such as the National Development Plan 2021 – 2025, the Economic Recovery and Growth Pan (ERGP), and the Central Bank of Nigeria’s measures to strengthen the banking sector and enhance credit facilities, should improve business operations and increase revenue generation. Reforms will lead to increased employment opportunities, improved infrastructure and a more stable macroeconomic environment, ultimately enhancing debtors’ ability to repay their obligations.

 “Even though the AMCON Act has gone through three amendments over the years, the obligors have mastered the operations of AMCON and have been taking advantage of the Court processes to frustrate AMCON. Despite the efforts made by this esteemed Committee in the amendment of the Act to aid our recoveries, some of the amendments are yet to be fully implemented due to some bureaucracy in government.”

Aside from that, Adaghe said, “AMCON obligors hide under legal technicalities to tie AMCON in Courts, exploring the loopholes in the statutes and the legal system. It is important to mention at this stage that the seed sowed by the past committees has yielded the much-needed fruit now awaiting a sickle to harvest the fruits and this will come by way of the support of this Committee to among others – designating specific AMCON Judges in the Federal High Court complexes across the country; accelerated hearing and granting of judgement on AMCON matters within 90 days; AMCON courts to sit at least three days in a week, and the provision of issuing bench warrants for recalcitrant and evasive obligors.”

Finally, he said, “To enable AMCON succeed in its National call to duty, AMCON solicits the support of this esteemed Honorable Committee Members in the following areas: Engagement with the Judiciary through the relevant standing committees of the National Assembly on Judiciary towards full activation of the special provisions of the AMCON act as amended; Engagement with other shareholders within the Judiciary for the implementation of the practice direction and Amendment of the Act may be required towards extending Banks contributions to the Resolution Cost Fund to ensure that AMCON outstanding liabilities are extinguished, to avert their crystallization to the Federal Government.”

Other people who made presentations from AMCON at the retreat include Mr Joshua Ikioda, the Group Head of Enforcement, Mr Najib Sulaiman, the Head of Strategy and Mr Norbert Enenmoh of the Legal Department. The retreat ran from Friday 16 to Sunday August 18, 2024.

• House Committee urges transparency

The Managing Director, Asset Management Corporation of Nigeria (AMCON), Gbenga Alade, yesterday revealed that the Corporation has made recoveries in the sum of N1.960 trillion, with cash recovery representing 43 per cent of the total recoveries. Alade made the disclosure while receiving members of the House of Representatives Committee on Banking and Other Ancillary Institutions, led by its Chairman, Eze Nwachukwu Eze.

In a statement by Head, Corporate Communications Department, AMCON, Jude Nwauzor, the AMCON boss informed the Committee that despite the shaky start-off model, the Corporation, with the support of the National Assembly, has made considerable recoveries.

“To date, the Corporation has made recoveries in the sum of N1.960 trillion. Of the total recovery, cash recovery represents 43 per cent; sale of bridged banks 13 per cent; sale of proprietary shares 11 per cent; clawback and repurchases nine per cent; sale of property assets & rentals nine per cent; investment income seven per cent, while others represent about seven per cent,” Alade explained.

He added that AMCON has disposed of proprietary assets worth about N651billion from inception to date. In addition, Alade said the Corporation has made a total repayment of N2.929 trillion to the Central Bank of Nigeria (CBN) from 2013 to 2023, which includes contributions to the Sinking Fund by other Deposit Money Banks (DMBs) and AMCON recoveries.

Responding to the briefing, Eze, who’s Committee was on its first official oversight function visit to the Corporation since Alade’s assumption of office in February, charged the Corporation to continue to innovate and adopt best practices in asset recovery, management, transparency, accountability and efficiency in the quest to recover the total outstanding debt of nearly N5trillion owed AMCON by some obligors.

Read Also: AMCON reports 28.8% decline in total assets for 2023

The Chairman said that once transparency, accountability, and efficiency remains the cornerstones of AMCON’s operations, as legislators, the committee members will be committed to providing the necessary support through appropriate legislative frameworks and oversight functions to ensure Corporation fulfills its recovery mandate effectively.

“Moreover, we recognise that AMCON cannot achieve its mandate in isolation. Collaboration with the National Assembly, which this Committee represents, other financial institutions, regulatory bodies, and other stakeholders is crucial. As representatives of the people, we are committed to fostering an enabling environment that supports AMCON’s efforts and promotes the stability and growth of our financial system.

“As we navigate through the current economic landscape, marked by global uncertainties, and domestic challenges, the role of AMCON becomes even more critical. Resolving non-performing loans, recovering debts, and managing acquired assets are key to ensuring the stability and resilience of our banking sector. It is essential that AMCON remains steadfast in its mission, adopting innovative strategies and leveraging technology to enhance its operations.

“AMCON, since its inception, has played a pivotal role in stabilizing the Nigerian financial system. In the aftermath of the 2009 global economic crisis, AMCON was established to address the non-performing loan crisis that threatened the stability of our banking sector. Today, as we reflect on the journey thus far, we acknowledge the significant strides made by AMCON in fulfilling its mandate. This visit aims to ensure that AMCON operates within the legal framework established by the National Assembly and achieves its objectives effectively and efficiently,” Eze said.

He added that the visit to AMCON is part of their legislative functions, as enshrined in sections 62, 88, and 89 of the Constitution of the Federal Republic of Nigeria 1999 (as amended), which empowers the National Assembly to oversight all Government Ministries, Departments, Agencies (MDAs) and Government owned Enterprises (GoEs) for judicious utilisation of Government Funds and Order 21(2) of the House Standing Orders, Eleventh Edition (as amended), which placed AMCON under the oversight jurisdiction of the Committee.