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  • Senate panel grills AMCON boss, Kuru over alleged N146bn loss in 12 months

    Senate panel grills AMCON boss, Kuru over alleged N146bn loss in 12 months

    Members of the Senate Committee on Banking, Insurance and other Financial Institutions, on Wednesday, December 13, grilled the management of the Assets Management Company of Nigeria (AMCON) over alleged woeful performance as indicated in its balance sheet recently submitted to the committee panel.

    The lawmakers decried a loss of N146 billion recorded incurred by the corporation in its operation in 12 months.

    The panel made the observations when the Managing Director of AMCON, Ahmed Kuru appeared before he committee to defend the agency’s 2024 budget.

    Apart from the chairman of the committee, Tokunbo Abiru (APC-Lagos East, other lawmakers present at the session include Senator Sani Musa, Senator Jimoh Ibrahim; Senator Adamu Aliero and, Senator Ifeanyi Ubah, among others.

    Speaking at the session, most senators on the committee raised concerns over the financial statements of the assets recovery agency, which indicated a huge loss.

    In his contribution, Senator Musa noted that most of the digits in AMCON’s balance sheets were in the negative.

    The lawmaker further explained that the same debtors had re-acquired some of the companies that AMCON took over due to non-performing loans, lamenting that the purpose of establishing AMCON had not been justified 13 years after its formation.

    He said: “I can see from the balance sheet, the summary of profit and loss. Most of the digits are at loss. Are we going to continue this way? If we are to do this after 13 years, then there is reason to call for the amendment of the Act that established AMCON or the outright scrapping of the corporation.

    “Our bad loans have been given for free and we have not seen any action from the regulator.”

    On his part, Senator Ibrahim observed that from the balance sheets submitted to the committee for scrutiny, it was obvious that the corporation was performing below expectation.

    He said that from the end of the year balance sheets the company recorded a loss of N146 billion, which according to him, called for concern.

    Read Also: AMCON to release 350 top debtors’ list at bankers’ summit

    Ibrahim said: “I am astonished that your balance sheet is not looking good at all. It calls for serious concerns.

    “For instance, your total comprehensive profit and loss at the end of the year came to a loss of N146 billion. The net operating profit and loss is N126 billion. This further calls for concerns about AMCON’s financial status.

    “This is a big loss. You are created to collect loans from debtors. Besides, the special powers of AMCON conflicts with the provisions of the Constitution of the Federal Republic of Nigeria, 1999, which is void and of no effect. You cannot operate in a draconian way with such special powers.”

    Ibrahim, whose firm was once taken over by AMCON, further questioned the management of the corporation why he was buying cash-collateralized loans.

    The Managing Director of AMCON, Ahmed Kuru, had in his presentation, said that if the Corporation had not been established, more than 21 banks would have gone under and more than  3,000 jobs would have been lost.

    He said that out of the  N1.8trillion that was used to purchase the loans, AMCON has recovered 96 per cent of the amount.

    Kuru said: “If AMCON was not created more than 21 banks would have gone under and more than 3,000 jobs would have been at risk, N2trillion at that time would have been at risk.

    “AMCON was not created to run any business, but a recovery agency. We don’t get into the business of individuals.

    “Out of the N1.8trillion that was used to purchase the loan, AMCON has recovered 96 per cent of that because of the interest elements, that is why recovery rate is still poor.

    “AMCON’s law does not allow anyone to buy asset from it. It’s against the law, you can’t buy your assets but they can pay your liabilities.”

    ReplyForward
  • AMCON to release 350 top debtors’ list at bankers’ summit

    AMCON to release 350 top debtors’ list at bankers’ summit

    The House of Representatives have asked the leadership of the Asset Management Corporation of Nigeria (AMCON) to release the list of its 350 top debtors at a Bankers’ Summit being planned by the legislators.

    AMCON data showed that 350 of its 12,000 total debtors owe 84 per cent of N4.7 trillion cumulative debts to the corporation.

    The chairman House of Representatives Committee on Banking and Other Ancillary Institutions, Hon. Eze  Nwachukwu Eze, disclosed this at the first 10th House of Representatives Committee’s retreat with the management of AMCON held at the weekend in Enugu, with theme: “Navigating Nigeria’s Financial Ecosystem for a Sustainable Future: The Role of AMCON.” 

    Declaring the retreat open, Hon. Eze said: “Our nation stands at a critical juncture in its economic development, and the financial sector plays a pivotal role in shaping the trajectory of our economic future. The banking industry, in particular, is a cornerstone of our economic stability and growth. 

    “As we navigate the intricate web of financial intricacies, we must acknowledge the indispensable role that AMCON plays in ensuring the stability and sustainability of our financial ecosystem. 

    He said: “Nigerians may not understand it, but when we host the bankers’ summit, which the 10th National Assembly is planning, which I have discussed with the Speaker of House of Representatives, Hon. Tajudeen Abbas  and he is very much ready to give us all the necessary support, there are so many things that have gone on in the financial sector, and are still happening that would be disclosed at that summit. 

    “In that gathering, we would want the Management of AMCON to be part of it. We would want AMCON to come and make presentations and release the full list of the 350 top debtors of Nigerian who have destroyed our financial system, and no power can stop that banker’s summit. 

    Read Also: Arik Air shareholders flay AMCON over airline’s ‘mismanagement’ 

    “At the end of the summit, we would ask Nigerians the sort of magic they were expecting you (AMCON) to perform in this kind of situation that you find yourself. So, the political will power to go after these debtors no matter who they are will be created…We want you rest assured that the legislative aspects would be taken care of.”

    “As we are all aware, the financial sector is the heartbeat of any thriving economy, and its stability is paramount to the overall well-being of our nation. AMCON, as a key player in this ecosystem, has been tasked with the responsibility of managing distressed assets, mitigating financial risks, and contributing to the stability of the banking and financial institutions in Nigeria. 

    “AMCON, established in 2010, was created with the foresight to address the challenges posed by non-performing loans and distressed assets within the banking sector. The Corporation has been a fulcrum in maintaining financial stability and fostering investor confidence in our banking sector. 

    Managing Director/Chief Executive Officer AMCON, Ahmed Lawan Kuru in his submission explained that was an honour for the Management of AMCON to attend the first retreat with the members of the 10th House of Representatives Committee on Banking & Ancillary Institutions. 

    Reminding the participants, the long historical background that led to the establishment of AMCON in 2010, Kuru informed that the Corporation irrespective of the challenges of debt recovery has to date, made recoveries in the sum of N1.8 trillion. 

    “Of the total recovery, cash recovery he explained represents 42 per cent, sale of four bridged banks 14 per cent, sales of proprietary shares 11 per cent, clawback & repurchases 10 per cent, asset sales & rentals 10 per cent, investment income seven per cent, proprietary assets (unsold) here per cent proprietary shares (unsold) three per cent and divestment from portfolio 0.4 per cent.”

    According to him, the House committee needs to weigh to see how it can shorten the long route through litigation that AMCON must face towards recovery.

    Kuru added: “Most of our activities are done through the Courts, particularly when all resolution efforts have collapsed. AMCON currently has over 2000 cases in the Courts (Federal High Court, the Appeal Courts, and Supreme Court). 

    “Obligors hide under legal technicalities to tie AMCON in Courts, exploring the loopholes in the Act prior amendment. Honorable members, with time obligors get wiser, which necessarily requires amendment of our Act. 

    “In quite a lot of instances, we only enjoy the protection of our committee from other avoidable interventions. AMCON enjoys Special Powers, however, which can only be exercised with the support of the Judiciary.”

    Insisting that it is the responsibility of the National Assembly to ensure that institutions of the government delivered on their mandates, Eze again added: “The House of Representatives Committee on Banking and Ancillary Institutions is committed to fostering a conducive environment for AMCON to carry out its mandate effectively. 

    “Our committee is poised to collaborate closely with AMCON to address the challenges facing them and implement strategic initiatives that will enhance its role in ensuring a sustainable future for Nigeria. We understand that navigating the complexities of the financial ecosystem requires a holistic approach, and as such, we are prepared to work hand-in-hand with AMCON to develop, and implement policies that will promote financial stability and economic prosperity.” 

    In continuation, the chairman added: “AMCON is like a rescue boat that is on a mission to make sure that the ship does not sink. Now we have also discovered that this rescue boat is facing some activities from some players (the debtors) that want the rescue boat to sink, so that both the rescue boat and the mother ship will all sink into the sea. When that happens, we all here and those that are not here will suffer for it. 

    But we cannot allow that to happen. AMCON came when it was necessary because the financial system was on the verge of collapsing leading the government of the day at that time in the history of our country to seat up AMCON. 

  • Arik Air shareholders flay AMCON over airline’s ‘mismanagement’ 

    Arik Air shareholders flay AMCON over airline’s ‘mismanagement’ 

    Shareholders of Arik Air have said the intervention of the Assets Management Corporation of Nigeria (AMCON) in the affairs of the carrier in the last six years is a gross mismanagement of a business enterprise.

    They described as atrocious the activities of AMCON’s Managing Director Ahmed Kuru and the Receiver Manager of Arik Air, Mr. Kamilu Omokide.

    The shareholders said the action of the agency’s boss and the airline’s receiver manager allegedly destroyed their business, triggered loss of value in resources and production capacity for Nigeria.

    In a statement by its Media Office and signed by Aideloje Godwin, the shareholders of the beleaguered airline said: “We restate without any contradiction that AMCON forced Arik Air into receivership in a Gestapo-like operation, led by Mr. Oluseye Opasanya (SAN) on February 9, 2017. Arik was not in default of any loan or lease payments to any of its bankers and lessors.

    “Suffice it to state that all Arik banking and lease facilities were performing and not in any default when AMCON forcefully took over Arik’s facilities. Therefore, they were not eligible bank assets (EBA) to have warranted AMCON’s receivership.

    “This receivership was executed via an ex parte order of the Federal High Court and enforced with two lorry loads of policemen with impunity and non-compliance with extant receivership laws. It was executed without any legal notice to Arik Air and the regulatory authorities; no form of inventory-taking, records of assets and liabilities. Arik Air executive management members were intimidated and barred from the airline offices.’”

    Read Also: Solid minerals will promote climate change, says Alake

    The shareholders challenged Kuru to publish any such loan/lease default letters with certified particulars of demand notices that caused Arik’s forced receivership by AMCON.

    They said: “The receivership was a conspiracy where the Federal High Court was deceived into granting an ex parte order. AMCON did not file any records of loan defaults and demand letters because there were none. Yet, it appointed receiver managers who mismanaged and destroyed the airline for over six years. The receiver managers inherited 19 aircraft which have today been reduced to abysmal two aircraft in operation.”

    On the Nigeria Customs Service (NIS) investigation of Arik in receivership, the shareholders urged the receiver manager and Capt. Roy Ilegbodu (Receivership CEO) to cooperate with the Customs investigators. 

    “We shall avail ourselves to the Customs’ authority, if and when invited,” the shareholders said.

  • Recalcitrant debtors threaten Fed Govt’s N5.3tr AMCON bonds

    Recalcitrant debtors threaten Fed Govt’s N5.3tr AMCON bonds

    The Federal Government, through the Central Bank of Nigeria, remains the main creditor (and owner) of the Asset Management Corporation of Nigeria (AMCON) holding N5.3 trillion of its bonds, including N1.3 trillion bonds issued to acquire Polaris Bank.

    Managing Director, AMCON, Ahmed Kuru made this known during a media forum in Lagos.

    He said from all indications, the AMCON might still have a long way to go in meeting its recovery mandate as the majority of 350 individuals and business entities with 84 per cent of the yet-to-be-recovered debts have tied AMCON in courts, a situation that has stalled efforts to resolve the cases.

    Kuru, during a recent meeting with the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, was told the Federal Government was working towards winding down the asset management giant, established at the height of the non-performing loan crisis in 2010, to clean up the heavily encumbered books of the banks.

    Kuru, during an interactive session, said the company was far from resolving the pending cases as litigation stalls processes leading to quick resolution of the pending cases.

    According to Kuru, 257 cases out of the 350 obligors who sit on over 84 per cent of dead assets of banks inherited by AMCON are  at different stages of litigation. Hence, he said, the assets used as collateral could not be liquidated by the organisation.

    Kuru also hinted that while some obligors of AMCON were jubilant,  some have stopped picking “our calls thinking that they will walk away from the debt once AMCON winds down”.

    Read Also:Arik Air Receivership – How Alhaji Ahmed Kuru, MD-AMCON Misinformed and Misled the Government.

    He said: “When some of them (the obligors) heard the news of the proposed AMCON sunset, they stopped picking our calls. So, in their mind, they believe AMCON would soon close shop, which would mean that the government would write-off the debt. I want to state  that the process of winding AMCON down will be a process, and nobody, no government would allow any debtor walk away. It is not possible.”

    Further information released by AMCON claimed that 350 obligors or 2.8 per cent of the total 12,700 debtors involved in the non-performing loan (NPL) hold 84 per cent of the total amounts, which have continued to accumulate interest.

    From inception, Kuru also disclosed in Lagos , that the Corporation has only sold 350 assets, while most are not in the market owing to legal encumbrances. But apart from litigation, pricing may have also slowed the speed of disposing of the assets. The pricing template is set by the CBN guidelines, which set the value above what prospective buyers consider above-market prices.

    For instance, Kuru revealed that more than 100 assets have been in the market for some time but “there are no buyers because they are overpriced owing to their purchase prize. He added, “Pricing of AMCON assets is very strict. Even when we get permission from the Central Bank to auction, we cannot still sell some of them because the price is still very high. It is not a case of picking the highest bidder, but a case of management getting an offer that must cover the debt an asset is pledged.”

    The AMCON boss asked the affected debtors who are interested in resolving their cases with the Corporation to make a serious offer, saying it “understands that the transactions involved are commercial and not criminal.” He said owners of Arik and other seized assets must present resolution strategies that make sense to AMCON, the CBN and the Ministry of Finance if they truly want to be listened to.

    He told the media that some debtors are disillusioned that the debts would be written off, hence they stopped picking up calls from the officials since the government disclosed that the programme would be brought to closure. He stressed that the debts would remain and would be paid even if AMCON ceases to exist.

    It disclosed that the All-Region Group Export Index increased by 0.02 per cent points mainly due to positive changes in prices of exports to Europe, America, and Asia.

    The Bureau further said the All-Region Group Import Index increased by 0.14 per cent points due to an increase in import prices to all regions.

    NBS noted that the All-Region Terms of Trade on average decreased by 0.13 per cent points.

    It said the major export Junkets of Nigeria in Q2, 2023 were The Netherlands, the United States of America, Indonesia, France, and Spain.

  • AMCON recovered N1.6tr debts in 12 years

    AMCON recovered N1.6tr debts in 12 years

    The Asset Management Corporation of Nigeria (AMCON) has recovered N1.6 trillion from debtors in the last 12 years, its Managing Director, Ahmed Kuru said  yesterday.

    Speaking during a media forum in Lagos, he said the corporation also received N2.3 trillion through remittances by banks into Banking Sector Resolution Cost Fund, otherwise known as Sinking Fund.

    The AMCON law requires banks to contribute 0.5 per cent of their assets annually to the Sinking Fund.

    Kuru, who disclosed that AMCON funding model will end in 2025, said the corporation deployed asset tracing strategy to track debtors that abandon the companies they borrowed with to start new firms. He said the intention of such obligors was to make debt recovery difficult for the corporation.

    He said some debtors stopped picking calls after they learnt that AMCON was winding down.

    “It is better you take our calls and get the best advise on how to repay or restructure your debts. It is not going to be bye bye from AMCON,” Kuru advised.

    He said that AMCON was created in 2011-2012 to protect N3 trillion depositors funds. He said 350 of the 12,000 debtors owe 84 per cent of the total AMCON debts.

    Kuru said the asset tracing strategy helped the corporation to trace, link debtors to obligations to allow easy repayment. 

    Speaking on Arik, he said the airline owners need to present debt resolution strategy  that makes sense to AMCON, Central Bank of Nigeria (CBN) and Ministry of Finance. 

    Read Also:Get more aircraft for Arik, NAAPE begs AMCON

    “The challenge of Arik Air Limited, in Receivership, under the auspices of the AMCON, may seem difficult, but the situation is not irredeemable. There is always a way out of every resolution situation however, there must be a situation of give and take, which is what we-AMCON, have been trying to achieve.

     “We are ready to sit down with the owner or owners of Arik if they are ready to agree on what makes sense to us, to them, and the Federal Government,” Kuru said.

    Kuru said that when AMCON engages and arrives at that agreement, we will as AMCON go back to the CBN as well as the Ministry of Finance (MOF), and share such resolution strategy with them.

    “If you recall, in the past, we resolved issues that are more difficult and more complicated than the Arik issue in the banks, oil and gas, manufacturing sector, real estate and investment, automobile, telecommunications, just to mention a few. But for any resolution to take place, the two parties or the parties involved must have understanding. We are convinced that there is always a way out.”

    Speaking on Arik, Aero, and the proposed NG Eagle, Kuru, said that  lately especially since the coming of a new government led by President Bola Ahmed Tinubu, there has been heightened campaign by some recalcitrant AMCON debtors especially from its aviation portfolio seeking to evoke the emotion of the public to perceive AMCON and its recovery activities from negative angle.

    “But those pushing that negative campaign forgot that Arik at the time had a about 50 per cent passenger load before AMCON took over in 2017 under a receivership arrangement. However, because the government of the day was interested in saving the airline because of its strategic role in Nigeria’s aviation sector, felt strongly that the airline must be saved from imminent collapse and national embarrassment,” he said.

    Kuru said the corporation under his watch remains a resolution agency that have supported businesses and would continue to support businesses because it is in the overall interest of the Nigerian economy.

    He said, “AMCON is a resolution agency of the government, and we look forward to any obligor or debtor that wants to come discuss with us with repayment plans. Our doors are always open to resolve debts because that is our primary function.

    “Aside from our recovery mandate, AMCON does not have a secret agenda. Transparency for us is very key. But, we also know that misinformation is part of the game, which is what some of our obligors specialise in but we want the media to know that we are very ready to provide accurate information. We deal with people who have interests and have issues with the organization. It is nothing personal,” he said.

    Kuru described debt recovery as difficult assignment. “We deal with people that are in distress, and people that are desperately not ready to engage. When some of them (the obligors) heard the news of the proposed AMCON sunset, they stopped picking our calls. So, in their mind, they believe AMCON would soon close shop, which would mean that the government would write-off the debt,” he said.

    He said the process of winding AMCON down will be a process, and nobody, no government would allow any debtor walk away. It is not possible,” Kuru affirmed adding that government can set up a task force to continue to recover debts.

    Kuru added:  “AMCON is conscious of the fact that it is dealing with obligors who are doing legitimate business but have taken loans they could not services that resulted in bad debts that the banks could not recover, which AMCON eventually bought over, and was mandated by the government backed by the AMCON Act as amended to recover. As such AMCON tries as much as possible not put the issues involving obligors on the pages of newspapers. But the obligor at every opportunity tries to send half-truths to the public to make AMCON look bad”.

  • AMCON: Last big push before sunset?

    “Every sunset brings the promise of a new dawn”
    — Ralph Waldo Emerson.

    Last week the federal government made true its resolve last June to set up an inter-agency framework that would comprise relevant government Ministries, Departments and Agencies, under the supervision of the office of the vice president, to ensure that institutions and individuals that are indebted to AMCON are not allowed to do business with government until they settle their debts. Of course, this was subsequent upon AMCON’s management request to the VP to pursue the criminal/legal angle on the whole transactions.

    The Vice President, Prof. Yemi Osinbajo, had announced the establishment of the committee under the leadership of the AMCON’s CEO, Ahmed Kuru, to recover the outstanding N5trn debt owed AMCON by institutions and individuals across the country.

    Agreeing with AMCON’s request showed clearly that the federal government is committed to lending its weight to AMCON’s recovery efforts. The intervention of the vice-president, which is at the instance of the corporation underscores the need to address the limitations AMCON has under its current law,  which gives it power to prosecute but hamstrung it from  enforcing compliance. The committee has representatives from all our institutions with such powers to investigate, arrest and enforce compliance—EFCC, ICPC, NFIU and Ministry of Justice.

    The debt at stake is monumental — N5 trillion. Astonishingly it is owed by few individuals and companies. More astounding is the fact that 20% of the defaulters owe 80% of the money in question. No wonder that, for a start, the committee will be going after the top 20 debtors.

    One may ask: why the sudden vigour in recovery efforts? Well, there are two key reasons.

    First, our country needs that money to rejuvenate the economy. The debt is about 60% of the 2019 budget of the federal government. So, if that can be recovered, the level of infrastructural development we would witness, if used judiciously, would be great. And if nothing else, we shouldn’t lose sight that it is taxpayers’ money. Secondly, AMCON’s sunset is looming. The 10-year life span given to AMCON at birth, in 2010, to stabilize and re-vitalize our financial system, which was on the precipice, back then, is around the corner.

    AMCON had carried out the task by buying up non-performing loans from financial institutions. It had, in the course of time, assisted eligible financial institutions to efficiently dispose of eligible bank assets; efficiently managed and disposed of eligible bank assets acquired by it; and obtained the best achievable financial returns on eligible bank assets or other assets acquired by it. In all, AMCON has bought the huge toxic bank assets and injected huge amount of funds to stabilize our financial system from systemic collapse. But its successes in stabilizing the financial system will not be fully celebrated until it is able to recover those debts owed it by individuals and companies.

    It is from these developments that I found the famous statement by Ralph W. Emerson, 19th century American poet and essayist, “Every sunset brings the promise of a new dawn” descriptive of AMCON’s situation today. .

    I see the current recovery effort of AMCON at its sunset as heralding a new dawn; a dawn that will give a big sigh of relief to government that its strategy introduced a decade ago has worked. And that may give genuine reason for AMCON to remain, as long as our financial institutions continue to lend money, and continue to do the good works. And can modern economy survive without loan facilitation by financial institutions?

    It is not as if Nigeria is the only country where the assets recovery model has been applied. The model has been introduced in other countries with the same grace period of 10 years. But, while it was smooth sailing in such countries as Malaysia, Ireland and the US, in Nigeria, it is taking time and proving difficult because of so many factors. Among them is our snail-speed court process. It is becoming a reality that in Nigeria, defendants are shielded from facing justice, while the complainants suffer unending court litigations.

    At the last count AMCON has some 3000 court cases to contend with. And this is certainly not helping its asset recovery efforts. AMCON may have recovered a lot of these asset but they cannot dispose of them because the clients have run to courts and the courts are slow in deciding the cases.

    Last June the vice president commended the current management of AMCON for recovering some N1.22 trillion of the bad debt despites all the hurdles before it and pledged the federal government’s resolve to support the corporation, which he fulfilled by constituting the current debt recovery committee.

    The commendation of the current management of AMCON by the Vice President is well deserved. Their measured successes are appreciable for those who know the Nigerian terrain and the arduous task of debt collection, which is very difficult everywhere in the world.

    The list of the top 20 debtors is in the public domain already. The top four number companies are Capital Oil and Gas Industries promoted by Ifeanyi Uba, NICON Investment Limited promoted by Jimoh Ibrahim,  Bi-Courtney Limited promoted by Wale Babalakin (SAN) and Arik Air by Chief Arumeni Johnson respectively. The four companies owe AMCON the sums of N115 billion, N59 billion, N40 billion and 200 billion respectively.

    The bottom three debtors among the 20 top ones under debt recovery committee’s radar are Inoelle Williams, Wilcox Awopudagha and Prince Buruji Kashamu, whose businesses owe AMCON about N13 billion each.

    It is instructive to realize that the concept of the presidential debt recovery committee emanated from AMCON as a way to circumvent the weaknesses of their operational structure by using the enforcement powers of existing institutions to achieve its goals. Although, ad hoc perhaps until the National Assembly amended AMCON Act comes to effect, that strategy will see AMCON revving up enforcement.

    The success of this latest approach will largely depend on the political will that the federal government will bring to bear on the matter to ensure it recovers what is due to the state without necessarily emasculating the industries involved looking at their contributions to the economy in recent past.

    No doubt, the resolve, if not the integrity of the members of the committee will be put to test. Heart-warming however is the fact that the body comprises heads of Economic and Financial Crimes Commission (EFCC), Independent Corrupt Practices Commission (ICPC), Nigerian Financial Intelligence Unit (NFIU) and permanent secretaries from ministries of justice and transport. And with the vice president, whose office, aside heading the economic management team of the federal government, also supervises the committee, Nigerians can rest assured that the committee will deliver.

    So, as the committee starts its work, it is expected that the doors of dialogue would not be totally closed on the faces of these captains of industries. On their sides, they, the industrialists, must sit up; come up with genuine and sincere offers to ensure closure. There must be a way to recover these assets.

    As all eyes will from this moment be on AMCON as it tries its latest strategy of debt recovery, could it be the last push before its sunset?

    AMCON has been the sun of our financial institutions in the last one decade. Its twilight is nigh. Like Mehmet Ildan, another poet, would say, “Sunset is a wonderful opportunity for us to appreciate all the great things the Sun (read AMCON) gives us.

     

    • Hassan wrote from Abuja.

  • AMCON takes over firms over N3.6b debts

    The Asset Management Corporation of Nigeria (AMCON) has taken over two companies —Bao Yao Futurlex Iron & Steel Company Limited, Abuja and Bao Yao Huan Jian Iron & Steel, Calabar, Cross River State. The companies are owing N3.6 billion.

    The takeover followed the order of Justice B.F.M. Nyako of the Federal High Court, Abuja, which mandated AMCON to take over all the assets of both promoted by Mr. Shen Yaozhang and Gen. Idris Garba.

    In compliance with the order, AMCON, through Mr. Robert Ohuoba, the Receiver who also received protective orders from the court, have taken possession of Bao Yao Futurlex Iron & Steel Company Limited, Abuja. The assets, which are now under AMCON belong to the obligors.

    The order also froze all accounts of the companies in any financial institution in the name or belonging to the defendants, which include; Bao Yao Futurlex Iron & Steel Company Limited; Bao Yao Huan Jian Iron & Steel Company Limited, Yaozhang, Ji Yunfeng and Gen. Garba and all financial institutions served with the order.

    The court also granted AMCON possessory order over all piece of land consisting of buildings/factory and situated at Esuk Utan Village, Calabar, Cross River State, more particularly described as Plot A23 – A30, Calabar Export Processing Zone; all those chattels, consisting of five Oil Tank Barges and seven Tug Boats etc.; as well as all piece of land consisting of an acre and situated at Kaduna in the Kaduna Local Government Area, more particularly described as Plot No. 13, Idoma Close, amongst others assets.

    Read Also: FG sets up panel to recover over N5 trillion AMCON debts

    Justice Nyako also sanctioned AMCON’s appointment of Mr. Robert Ohuoba, as Receiver over the business and stock in trade and over all fixed and floating assets of both Bao Yao Futurlex Iron & Steel Company Limited and Bao Yao Huan Jian Iron & Steel Company Limited wherever they may be found within the jurisdiction of the Federal High Court.

    The court also directed the Inspector-General and the Commissioner of Police, in all the states of the federation to assist and protect the bailiffs of the Federal High Court and the Receiver, Mr. Robert Ohuoba to carry out the takeover.

    Confirming that AMCON had already taken over the assets/properties as directed by the court, Head, Corporate Communications, AMCON, Jude Nwauzor, said: “We saw it coming because the said debt is long overdue. Like we have always said, going to court with obligors is usually the last resort for us as a corporation. Whenever you see us take over company as is the case in this instance, it means we must have patiently tried to resolve the matter without going to court.

    “Taking over the firm as directed by the court is an indication that all efforts by AMCON to get the obligor to amicably repay the indebtedness have proved abortive. If you have exhausted all avenues of peaceful resolution, there is no other option available to the AMCON than to commence enforcement action against Bao Yao Futurlex Iron & Steel Company Limited as well as Bao Yao Huan Jian Iron & Steel Company Limited as directed, which is also provided under Section 49-52 of the AMCON Act.”

    Last week, Vice President Yemi Osinbajo, AMCON Board Chairman Muiz Banire and Director/Chief Executive Officer Ahmed Kuru reiterated the fact that AMCON would collaborate with relevant government agencies in the country to intensify its chase on recalcitrant obligors of the corporation over a debt profile of over N5 trillion. Expectedly, AMCON has continued to sustain its high tempo of recoveries, which actually began last year when the government agency strategically refocused its recovery activities to more of enforcement.

  • Appeal Court: AMCON can’t take over firm’s property

    The Court of Appeal sitting in Lagos has quashed a Federal High Court’s verdict, which authorised Asset Management Corporation of Nigeria (AMCON) to take-over a company’s property.

    It held that the high court order did not comply with the principle of fair hearing.

    Justices Mohammed Lawal Garea, Ugochukwu Anthony Ogakwu and Gabriel Omoniyi Kolawole unanimously set aside the Federal High Court decision by Justice Mohammed Idris (now of the Court of Appeal), and ordered it to re-list and hear the case.

    In the lead judgment, Justice Ogakwu, held that the appellant, Suru Worldwide Ventures Nigeria Limited’s right to fair hearing was breached when the trial court heard and determined AMCON’s suit, being the alleged debtor and whose properties were the subject matter of the suit, without hearing from the appellant.

    It was further  held that the trial judge erred in law, when, without due regards to the relevant provisions of the Evidence Act, 2011 particularly section 131(2) and section 32 of AMCON Act, 2010 (as amended) and without any concrete evidence, particularly the loan purchase and limited services Agreement (Loan Purchase Agreement), granted AMCON’s claims against the appellants.

    AMCON, in its defence, had claimed that the suit at the lower court was not seeking for determination of any of the rights of the appellant and as such, the lower court had the requisite jurisdiction to entertain, determine the suit in the absence of the Appellant and that it was not an abuse process.

    AMCON argued that its failure to attach the loan purchase agreement by which it acquired the appellant indebtedness from the bank did not vitiate the judgment of the lower court.

    Justice Ogakwu traced the genesis of the case to facilities granted to the appellant by defunct Oceanic Bank (succeeded by Ecobank) and which outstanding debt was acquired by AMCON.

    He noted that the appellant was not a party at the lower court in the proceedings subject of this appeal, but that AMCON, through the judgment of court, took over its properties located at No. 86, Opebi Road, Ikeja, Lagos, No. 12, Reverend Ogunbiyi Street, G. R. A, Ikeja and No. 22, Allen Avenue, Ikeja, Lagos.

    The appellant court said the parties sued by AMCON at the lower court were not party to the Deeds of Legal Mortgage, so they could not have assisted the lower court in the determination whether the rights under the legal mortgage had been crystallised.

    “The parties sued at the lower court, the Inspector-General of Police and the Commandant-General of the Civil Defence Corps, are definitely not in a position to proffer any information as to the state of the mortgage debt.  There were a lot that could have been attained in the Judicial and Judicious determination of the matter if the Appellant had been made a party and given a hearing in the matter.

    “The Appellant was not given the opportunity to be heard.  The Appellant only became aware of the suit when execution of the lower court judgment was levied,” Justice Ogakwu said, holding that: “The Appellant is a proper and desirable party and that the entire proceeding and Judgment “constituted a manifest breach of the Appellant’s right to a fair hearing.

    “The appeal being meritorious succeeds.  The decision of the lower court is set aside and the case is remitted to the lower court for hearing de-novo with the Appellant as a party.  The Appellant is entitled to the sum of N100,000 as cost of this appeal,” Justice Ogakwu concluded

  • Anxiety over AMCON’s N5trillion debt

    Worried about the different legal landmines it has to navigate to recover the N5trillion debt yet to be paid by recalcitrant debtors, the board of Asset Management Corporation of Nigeria (AMCON) is leaving no stone unturned in its quest for justice, report Ibrahim Apekhade Yusuf and Charles Okonji

    The board and management of Asset Management Corporation of Nigeria (AMCON) is in a horns of a dilemma, in a manner of speaking.  

    Reason: it has been battling to recover debts in arrears of N5trillion with minimal successes thus far.

    How it all started

    Early in its operations AMCON acquired about 13,774 non-performing loans (NPLs) worth N3.6 trillion from 22 commercial banks and provided financial accommodation of N2.2billion, protected N4.7trillion of depositors’ funds and interbank takings as well as saved approximately 14,000 jobs.

    Through AMCON’s intervention, the federal government successfully managed to save the banking system from systemic collapse. But this achievement will not be complete until and unless it recovers those bad debts, which it used taxpayers’ money to purchase.

    Reality bite

    Today, AMCON seems to have exhausted all strategies in debt recovery books in its bid to get the job done. For example, AMCON recovered the sum of N152.3 billion from its equity injection of N1.49 trillion into five Eligible Financial Institutions (EFIs). This represents a 10% recovery rate on investment. Similarly, AMCON successfully divested the three bridge banks to private investors for a combined sum ofN207.8 billion a 23% recovery rate on amount invested.

    Subsequently, the Corporation tinkered with the novel idea of Asset Management Partners (AMPs).  The AMPs are consortiums with specialist skills required to ensure recovery and debt resolution from banking, legal, valuation and accounting backgrounds. The move is AMCON’s strategy to resolve over 6,000 accounts with loan balances of N100 million and below.

    In this arduous task of debt recovery Ahmed Lawan Kuru, managing director and CEO of AMCON, has maintained that he’s is not oblivious of the fact that debtors are not necessarily enemies and that they should be supported to transform their NPLs to RPLs (re-performing loans) through enhancing their productivity. That has been tried successfully with some obligors. The case of Skye Bank (now Polaris Bank) in 2018 and Arik Air takeover provide good examples here.

    AMCON, provided working capital in excess of about N4 billion to Arik Air Limited to salvage its operations. It is important to note that Arik Air, prior to the injection of the working capital, was indebted to AMCON to the tune of N142 billion. The efforts have since effectively stabilised the operation of the airline.

    AMCON was also instrumental to the rescue of Skye Bank Plc. (now Polaris Bank Limited) orchestrated by the CBN and the Nigerian Deposit Insurance Corporation. In September 2018, AMCON injected the sum of N898 billion into Polaris Bank Limited to prevent it from collapse.

    While giving a fresh perspective on AMCON’s recovery drive, Bashir Ibrahim Hassan, a financial analyst, from Abuja said, AMCON’s interventions have largely worked. “The truth is that no company or individual is forced to borrow money in the first place. Ultimately, if companies owe a debt, it’s because they chose to borrow money. Their lenders made that loan, or offered the credit line, contingent upon a documented pledge to pay back. This means creditors do have a right to their money, and a debt collector is simply trying to reclaim what is legally and ethically owed by the debtor.”

    New thinking

    From available information, so far AMCON) has recovered about N1.22 trillion of the bad debt, with about N5 trillion still outstanding. But to many discerning observers, the agency’s reputation has for long been blemished by the impression that, while recoveries are made from those without political clout, well-connected people known to be big debtors walk the streets freely.

    However, if the blessed assurance of Vice-President Prof. Yemi Osinbajo is anything to go by, things are about to change for the better.

    “I think the time has come for us to set some examples with some of these top debtors of AMCON, which…will serve as deterrent to others.”

    The federal government, he said, will set up an inter-agency collaboration framework that would comprise relevant government Ministries, Departments and Agencies supervised by his office to ensure that institutions and individuals indebted to AMCON were not allowed to do business with government henceforth. This, expectedly, will hit the obligors hard and will force them to cough some millions to settle the debt they owe AMCON.

    He then assured the management and the board that the federal government is “committed to working more closely with your administration to ensure that these monies are recovered from AMCON obligors, because it will help our economy and provide the government with more money to continue to improve on the development of infrastructure across the nation.”

    Interestingly, such marshal order from the presidency sends the right signal that it won’t be business as usual for debtors.

    As to be expected, in line with its new mandate AMCON has forged a synergy of cooperation with relevant law enforcement agencies to achieve its set objective.

    One of the key law enforcers AMCON is already working with is the Independent Corrupt Practices and Other Related Offences Commission (ICPC).

    AMCON paid a courtesy call on the agency in its headquarters in Abuja last Wednesday, where its Chairman, Prof. Bolaji Owasanoye disclosed plans by the commission to collaborate with the former towards the recovery of N5trillion owed AMCON by obligors. He made the declaration when he received the Board and Management of AMCON led by the Corporation’s Board Chairman, Dr. Muiz Banire SAN.

    Prof. Owasanoye who received the AMCON delegation at ICPC headquarters while describing the huge debt profile of AMCON as sobering situation especially as the figure represents about 50 per cent of Nigeria’s 2019 budget, further said the situation has become existential challenge for the country since the few people who are holding the country to ransom are still walking free and waxing strong in the society.

    Considering the positive impact, the funds would have in the economy if recovered, Prof. Owasanoye declared that the time has come for the ICPC and other relevant sister agencies to partner AMCON and support the debt recovery drive. He however pledged that the ICPC under his leadership is ready to work with Ahmed Lawan Kuru, Managing Director/Chief Executive Officer of AMCON and the Board members to recover as much of these debts as possible before sunset.

    “We have to be practical in our approach. Something needs to be done and very fast too given the approaching AMCON sunset because this is public funds we are talking about here. We need AMCON and ICPC to work closer and develop a strategy that would work. We need the public to know the opportunity cost of the huge debt to the Nigerian economy, we need to share information as sister agencies locally and internationally and treat this matter as a last lap race by setting up a joint taskforce to deal with this sobering issue,” he added.

    The ICPC boss, who is of the opinion that obligors of AMCON are made to face the music, which he said would serve as deterrent to others further added, “If these matters are not properly challenged and well treated, we can predict based on history that these set of people or their clones would repeat this circle of borrowing and would tell you that in the past, some people borrowed and defaulted and nothing happened. So something has to be done.”

     

  • N12.9b debt: AMCON takes over luxury homes in Lekki

    The Asset Management Corporation of Nigeria (AMCON) on Tuesday took over several multi-billion naira properties in Victory Park Estate, Lekki, Lagos, following a N12,966,510,191 judgment debt it won at the Court of Appeal in Lagos.

    The properties included assets of Knight Rook Limited situated within Victory Park Estate, among other assets.

    AMCON’s move followed the dismissal of an appeal filed by Revd Olajide Awosedo against an October 3, 2017 judgment of the Federal High Court in a suit marked FHC/L/CS/744/17 – Asset Management Corporation of Nigeria v. Knight Rook Limited & Ors.

    The appellate court also awarded a cumulative sum of N12,966,510,191 in favour of AMCON against Knight Rook Ltd, Grant Properties Ltd, Revd Olajide Awosedo, Olawunmi Olajide-Awosedo, Abimbola Olajide-Awosedo and Fibigboye Estates Ltd.

    AMCON officials and Sheriffs of the Federal High Court, Lagos were protected by a detachment of Police officers as they enforced the June 3, 2019 judgment.

    The Sheriffs told residents of the estate that they were on lawful duty to execute the Federal High Court judgment against the assets of certain entities, which were allegedly indebted to a consortium of banks, but which debts were taken over by AMCON.

    Some residents, who spoke to The Nation on the condition of anonymity, confirmed the development.

    Read Also: Hurdles before AMCON’s N5.4tr debt recovery bid (2)

    They noted that they were aware of court actions on the alleged debt and the collateral land, as well as the judgment, adding that many of the residents who had earlier acquired titles from the alleged debtors were affected by the judgment.

    Others stated that they were in receipt of an official statement by AMCON to residents, notifying them of the appellate court judgments, upholding the lower court judgment.

    The statement, seen by The Nation, reads in part: “AMCON hereby notifies all Occupiers, Residents and all persons laying claim to any portion of land comprised within the Victory Park Estate, Lekki, Lagos that on 3rd June 2019, the Court of Appeal (Lagos Division) in the Appeal No: CA/L/146/18 dismissed the Appeal filed by Rev Olajide Awosedo against the Judgment of the Federal High Court delivered on 3rd October 2017 in the Suit No: FHC/L/CS/744/17 – Asset Management Corporation of Nigeria v. Knight Rook Ltd & Ors, by which a Judgment sum of N12,966,510,191 was cumulatively awarded in favour of AMCON against Knight Rook Ltd, Grant Properties Limited, Rev Olajide Awosedo, Olawunmi Olajide-Awosedo, Abimbola Olajide-Awosedo and Fibigboye Estates Ltd .

    “Which judgment also specifically foreclosed the Defendants’ right to the assets of Knight Rook Limited comprised within Victory Park Estate, Lekki, Lagos, among other assets, in satisfaction of the Judgment, which Judgment has been executed by AMCON.”

    The statement further directed all persons affected by the judgment and enforcement to contact AMCON through its Solicitors or its Receiver/Manager.

    It was gathered that some of the affected residents had since resolved with AMCON by ratification, while others were about taking steps to do same.