The Nation Newspaper

Tag: AMCON

  • AMCON’s lamentation

    •There is a lot more the corporation can do to make the debtors pay

    Troubling – perhaps best describes the latest revelation by the Asset Management Corporation of Nigeria (AMCON) that some 350 Nigerians account for 80 percent of its entire debt; more troubling however is the corporation’s feigned helplessness on a matter that now constitutes a terrible blight on the financial system.

    Last week, AMCON’s managing director, Ahmed Kuru, told the News Agency of Nigeria (NAN) that these individuals and/or businesses linked to them owe N4.3 trillion of the N5.4 trillion debt profile of the company – and this against an unflattering overall scorecard of about N700 billion of debt recovery.

    His words: “I can tell you that today, our major challenge has to do with the judicial process…In other climes, what they do is that they allow AMCON to own the assets ab-initio, which means I have paid for the loans from the commercial banks, I have taken over the loan and I will take it over with the assets so I can sell the assets from day one.

    “But here, somebody can decide to take you to court and he has to be heard. He can lock you up with judicial processes and technicalities for 10 years, 15 years or even 20 years”.

    It is a familiar story. Our banks parcel out the commonwealth to a privileged few in the name of credit – most often poorly collaterised. As sure as most of the credit decisions turn out, they go bad. The ensuing toxic assets are traded by the banks for cash while the corporation takes them over, hoping in the end to get the debtors to pay.

    Of the lot, some N4.3 trillion – one half of the Federal Government’s entire 2018 budget – farmed out to barely 350 individuals/entities in such circumstances! And now, AMCON says there is no way the country is going to write off the huge sum sitting on the balance sheet of the Central Bank of Nigeria (CBN). In the meantime, its managing director blames the judicial system for unduly delaying the resolution process.

    We do sympathise with AMCON over the frustratingly slow pace of judicial processes which it holds responsible for its inability to resolve many of the cases as expeditiously as it would ordinarily have wished. It is also possible that the existing laws no longer serve the corporation well and so would need to be changed. Given the difficult circumstances under which AMCON came into being, that would be understandable. The way to go however is not to use the judiciary as alibi for inertia as AMCOM routinely does, or moan endlessly about the situation it claims is beyond it, but rather to take steps to get the law amended.

    At the same time, it needs to be said that the corporation hasn’t quite made a convincing case about its utter helplessness even with the existing law, considering how swiftly and effectively it was able to take over two foremost airlines – Arik and Aero – when both serially defaulted in their obligations to it. Or was it a case of the promoters of the two entities not willing to deploy the law to tie AMCON’s hands? Put in another way – what made it possible for AMCON to move against the two cases while rendering it nigh impossible when it came to the others?

    As a baby of the bankers committee, and to the extent that the bad loans being complained about all originated from the banks, a framework of collaboration would seem to us an imperative if only to get the job done. Nothing, as far as we can see, makes it impossible for AMCON to go after the assets of the loan defaulters. All that is required is diligence of efforts and the will to go the whole hog.

    A tardy judicial system notwithstanding, there must be something that the financial services industry as a whole can do to deal with individuals/entities known to have acquired ignoble records of preying on the system. But nothing here suggests that the judiciary should not look inward, with a view to helping the system and the country to facilitate the recovery of this huge debt from our high profile debtors.

  • AMCON to seize N5.4tr debtors’ assets

    Bank debtors who are owing N5.4 trillion are set to lose their assets.

    They have failed to honour their promises to pay, the Assets Management Company of Nigeria (AMCON) said yesterday.

    AMCON Managing Director and Chief Executive Officer Ahmed Kuru told the News Agency of Nigeria (NAN) in Abuja that the N5.4 trillion debt had lingered for too long.

    Kuku said AMCON was tired of obligors (debtors) lying about staggered payment plans, which they never complied with.

    He said the N5.4 trillion debt had been with the banks for five years before AMCON bought them over, adding that after seven years of the companies’ operations, the obligors were yet to pay.

    “Resolutions through staggered plans have never worked. Let us not forget that before those loans were transferred to AMCON, they had been with the banks for over five  years.

    “Now, AMCON is almost seven years, so the facility has been running bad for 12 years. It is not easy to recover those kinds of facilities.

    “So now we have changed our strategy from sitting down and drinking tea and the obligors telling us lies and we pretend that we don’t know you are telling us lies.

    “There is no more time for lies because we have a sunset period.  So now our focus is on recovery.  We do not want to hear anything; you cannot come and tell me you are going to pay me in the next six years. I do not have that time.

    “If you cannot pay me the money now, then give me my assets, because the assets belong to AMCON so that we can sell it.”

    Kuru added that in the case where the registered assets of a debtor-company not enough to clear its obligation,  AMCON would also go after the directors and their private companies.

    He said: “We are training our people more to see that they become more efficient.

    “Most fundamentally, we have changed our strategy. Before, our strategy had been only resolution: you come, you give us a payment plan and we respect it.

    “But we have realised that more than 80 per cent of AMCON’s recoveries are as a result of either forfeiture or taking over of businesses or outright cash payment.

    “My law allows me to not only go after the assets that are served as collateral but I can also go after the directors of companies. I can go after the assets that have not been served as collateral.

    “This is where we are now heading to because the law had anticipated this situation that we are now in,” he said.

    Kuru said there was need for some sections of the law to be amended, adding that the company was working with the National Assembly to amend laws.

     

  • AMCON: 350 Nigerians owe over N4.3 trillion

    Over 350 Nigerians are said to be responsible for over 80 per of the N5.4 tillion debt profile of the Asset Management Corporation of Nigeria (AMCON),

    Managing Director/Chief Executive Officer of AMCON, Mr. Ahmed Kuru disclosed this in an interview with the News Agency of Nigeria (NAN).

    According to Kuru, the 350 Nigerians or their businesses, owe a whopping N4.3 trillion of the N5.4 trillion debt profile of the company, an which is over 50 per cent of the 2018 Budget of Nigeria.

    Speaking on the challenges faced by the company and the hitches experienced during recoveries, the MD/CEO of AMCON said that

    He decried that it was unfair that AMCON was now only known for recoveries and taking over of companies, stressing that when the company played the first two roles of intervention and support, nobody complained.

    “Our responsibility if first to intervene, provide support and then recover: we have done the two, nobody has complained, now that we are doing the third people are complaining.

    “The people complaining are those people that do not want to meet their obligations. Some of the obligors owe as much as N200 billion.

    “We have 350 Nigerians that have obligations or control more than 80 per cent of all AMCONs debt portfolio.

    “So if you are talking about N5.4 trillion only 350 Nigerians are supposed to pay more than 80 per cent of that amount, and they are normal people you see on the street.” he said.

    He said that loans recovery was not a pleasant job, stressing that most people dod not want to pay loans.

    He said that there was no way AMCON or Nigeria was going to write off the over N5.4 trillion debt sitting on the balance sheet of the Central Bank of Nigeria (CBN).

    He therefore said that the only way to get those evading their paybacks to pay was to use the instrumet of the law.

    He however said that the judicial system was a major challenge to the operations of AMCON.

    “I can tell you that today, our major challenge has to do with the Judicial process.

    “In other climes what they do is that they allow AMCON to own the assets ab-initio, which means I have paid for the loans from the commercial banks, I have taken over the loan and I will take it over with the assets so I can sell the assets from day 1.

    “But here somebody can decide to take you to the court and he has to be heard. He can lock you up with judicial processes and technicalities for 10 years, 15 years or even 20 years.

    “If we can have a system where rightly or wrongly we can conclude a case within three months, we can finish our assignments and go.

    “The most fundamental thing is that this money must be recovered whether they like it or not.

    “So it is either they come to us and we negotiate and have a payment plan, or we take over your assets: that is what the law says, it has nothing to do with AMCON,” he said.

    Kuru regretted that most times, even when the obligors come and negotiate a payment pattern, they end up not paying at all.

    He therefore added that AMCON had come to the point where it will resort to going directly to confiscate assets rather than wasting time on payment negotiations.

  • AMCON, stakeholders partner on asset disposal

    The Asset Management Corporation of Nigeria (AMCON), is collaborating with stakeholders on ways of disposing its toxic assets, the Managing Director/CEO, Mr. Ahmed Kuru has said.

    Kuru, who was represented by Aminu Ismail, Executive Director in charge of Operations, AMCON at a two-day Asset Sales Strategy Retreat, which ended in Abuja yesterday, said part of the agenda was to expand the scope of its sales strategy by engaging professionals from the real estate sector, including legal experts and regulatory stakeholders, as well as   cross-fertilise ideas on better measures to follow to enable AMCON dispose its huge assets at good value and in good time in line with AMCON’s mandate.

    “As you may be aware, one of the key objectives of AMCON is—to obtain the best achievable financial returns for all assets acquired. Following the acquisition of Eligible Bank Assets (EBAs), AMCON is now saddled with the responsibility for recovering the bad loans either through cash repayments or asset forfeitures/foreclosures.

    He said the bulk of recoveries which have been recorded at AMCON are in form of asset, saying that considering the fact that AMCON’s obligations to the Central Bank Nigeria (CBN) is in the form of cash repayment, AMCON therefore has the responsibility of converting the assets into cash in order to meet the repayment obligations.

     

    Kuru said as at December 2017, AMCON has recoveredN731billion (excluding claw backs). Out of this amount, properties accounted for approximately 35 per cent. On the flip side, he stated that the Corporation noticed an increasing decline in its ability to dispose of assets at competitive market rates due to the several factors including inflation among other market dynamics.

    With such indices, Kuru again said: “At AMCON, we have realized that we cannot continue to do business as usual – it has therefore become imperative for us to seek more innovative ways of converting our huge portfolio of assets into liquid cash as quickly as possible. We have convened some of the most resourceful real estate professionals and legal experts to this forum to help brainstorm through the issues and proffer practical solutions to the challenges confronting AMCON. We also invited critical regulatory stakeholders to contribute to the discourse toward finding workable solutions.”

    Also speaking,  Executive Director in charge of Asset Management at AMCON, Dr. Eberechukwu Uneze, who also chaired the plenary session stated that there was dire need to have professionals, experts and agencies collaborate with AMCON because it has a stockpile of assets, which it is finding difficult to dispose in the regular open market. These assets, he said, cut across critical sectors of the economy such as real estate, energy, transportation and aviation, maritime, agriculture and manufacturing just to mention a few, all of which he said must be disposed as quickly as possible against all odds the agency is challenged with.

    The retreat featured high-powered presentations and contributions including Appraisal of Methods of Valuation Considering Achievable Market Value by Victor Adekunle Alonge, Board member, and Chairman, Professional Practice Committee (PPC), Estate Surveyors & Valuers Registration Board of Nigeria; Strategies for Conducting Successful Marketing Campaign and Attracting Buyers for AMCON Assets by Mr. Aigbekan Osas; Value Optimisation Strategies for AMCON Assets, which was jointly presented by Obi Mkparu, a real estate investment consultant and Akingbade Tunji of Akingbade & Associates.

    Other presentations include Creating a market for AMCON Assets, delivered by Chinwe Ajene-Sagna of Strategic Reality; Legal Documentation Impediments on the Sale of AMCON Assets by Albert Nwanozie; Challenges Experienced in the Sale of AMCON Assets by Olamipo Macaulay. There were also contributions from Mr. Chuka Agbo SAN, Managing Partner, Lexavier Partners; High Chief Isaac Folorunsho; Lanre Shittu, a Deputy Director with the Central Bank of Nigeria; Mulikat Balogun, Registrar of Titles, Lagos State and Ibrahim Bamidele, Director of Land Services, Lagos State; Aliyu Abubakar Kalgo, AMCON Head of Asset Sales and a host of others.

    AMCON was established in 2010 as a resolution vehicle to purchase the non-performing loans from banks, inject liquidity into the banks and subsequently recover the purchased bad loans. Over the last eight years of existence, AMCON has successfully stabilised the Nigerian banking sector by restructuring and collecting some of these loans. What is outstanding on its portfolio at the moment are hardcore debts, which the corporation is doing everything within its powers to settle as quickly as possible.

  • Keystone Bank sold at N41b, says AMCON

    • Debt recovery battle ‘not personal’

    Managing Director/Chief Executive Officer, Asset Management Corporation of Nigeria (AMCON), Ahmed Kuru, has said the sale of Keystone Bank to new investors at N41 billion helped to boost the corporation’s performance in the last financial year.

    He said AMCON had acquired 12,537 Non-Performing Loans (NPLs) worth N1.7 trillion from 22 financial institutions, following the 2009 banking crisis.

    “Gross earnings also increased by 23 per cent to N341.8 billion, a 21 per cent increase in interest income to N42.6 billion as well as the N41 billion sale of Keystone Bank,” he said in a statement.

    Kuru said AMCON was set to deal  with the top assets in its portfolio and would take steps to recover its debts. He said AMCON’s obligors, especially politically exposed individuals and business heavyweights, who hitherto thought they were untouchable, would not be spared in the enforcement by the recovery agency.

    According to him, AMCON has released its 2017 Audited Accounts. He said as a result of the new recovery strategy, the corporation is restructuring its processes to enable it go after the crop of recalcitrant debtors in a manner that has never been witnessed before, assuring that AMCON would not engage in any illegality.

    He said: “I want Nigerians to understand that our assignment at AMCON is not just tough, but a daunting challenge so we actually deserve the support of the media and that of the public. I think people need to pity us because we are at that stage in the life of the corporation where we are dealing with the hardcore because the low hanging fruits have been dealt with earlier in the life of AMCON. I want you to understand that we are sitting on a substantial amount of assets, which we must one way or the other resolve on or before our sunset, which is around 2023/24.”

    He reiterated that AMCON would pursue every obligor, especially the 350 debtors of AMCON who account for almost 80 per cent of the over N5 trillion huge debts, which must be recovered because AMCON borrowed to buy the Eligible Bank Assets (EBAs) during the first and second phases when it bought over the bad loans from the banks.

    He continued: “As I said earlier, we will deal with some of those key assets very soon like the Peugeot Nigeria Limited in Kaduna, CDL, Aero Contractors, Arik Air and a host of others. But I must tell you, as we close in on these individuals and entities that owe us, I want you to know that they will call us names, they will blackmail us, they will threaten us, malign and harass us. However, I can tell you that hard as they will try, we will not be deterred in going about our normal duties as mandated by law”.

    “But as we do, we ask ourselves first if the action will stand right before God Almighty; secondly, will the action be in our national interest and, is our action within the rule of law. If the answer to these three guiding principles is yes, AMCON takes decisions. It is nothing personal.”

    On the 2017 Audited Account, which he described as better than that of 2016, he said though the corporation was not established to make profit like commercial banks, it could still return to profit this year after losses last year narrowed as the economy rebounded from its worst contraction in more than two decades.

    The loss for the year through December improved to N16.4 billion ($45.3 million) from N164.9 billion the previous year. ‘’What that meant is that, if the economy continues with a positive outlook as it experienced in line with the expectations of the Federal Government, AMCON would be expected to return to profit at the end of the 2018 financial year,’’ he added.

     

  • 5,000 AMCON debtors go into hiding

    Over 5,000 debtors in the books of Asset Management Corporation of Nigeria (AMCON) have gone into hiding making it difficult for the corporation to trace them.

    AMCON Managing Director, Ahmed Kuru, who disclosed it yesterday during a media parley in Lagos, said the debtors will surely be found. He said the corporation has engaged lawyers and asset tracers to go after them, adding that hiding does not solve the debtors’ problems nor absolve them of their obligations. He however said the corporation has so far recovered N740 billion at the close of 2017 financial year.

    AMCON had acquired 12,537 non-performing loans worth N1.7 trillion from 22 financial institutions, following the 2009 banking crisis.

    “Some of them have decided to change their addresses, and there was even an instance where someone’s house, was number 19, he legally removed it to plot 2015. If we looked for him, we will not find him, because he has changed his address,” he said.

    Continuing, he said: “But we are looking, and hiding will not help. To borrow money is not criminal. We must borrow money from banks. But what we do thereafter  will make it criminal. If you want to hide under national hero, there is a problem. It is an obligation, and most loans are taken from depositors’ money. It is simple logic, if you do not pay, banks needs to collect their money for them to pay depositors. So, we must meet our obligations”.

    The AMCON boss also spoke on debt allegedly owed the corporation by the promoter of The Hardley Apartments and former captain of the Nigeria Super Eagles, Nwankwo Kanu.

    AMCON had in 2015, obtained an order from the Federal High Court, which gave the corporation permission to take possession of The Hardley Apartments located at No. 46 Waziri Ibrahim Crescent, Off Elsie Femi – Pearse Crescent, Off Adeola Odeku Street, Victoria Island, in Lagos State. This order still subsists, pending the determination of the substantive matter.

    When asked if Kanu’s debt will be forgiven based on his status as a “national hero”, Kuru said: “Part of the obligation to be a national hero is to meet obligation. You must be able to meet your obligation. A hero must be able to meet his obligations. You took a commercial loan to set up a hotel. What he told us was that somebody cheated him. He had one partner that was supposed to be remitting money and was not remitting money. How does that concern us?  Let him take that person to court”.

    Speaking further, he said: “I think part of the integrity test is for somebody’s ability  to honour his obligation voluntarily without going through court process. If you want some concessions and some considerations, I think that is another issue entirely. But you cannot on the basis of being a national hero not meet your debt obligation because I have not heard of any ‘National Heroes’ Fund”.

    Kuru said the corporation will by next month be releasing the names of debtors to the press, and the obligations standing against their names.

    “But we decided last week that we will give them a last chance, and take this as a final notice. You have N10 billion obligation, and you want to be a senator. Fine, you may not have N10 billion to pay me. But let us sit down and have understanding. I will pay you in two years, or I will pay you in five years. There is no body to give N2 billion or N30 billion today.  But sit down with us and explain how you want to pay. They are just looking the other way and want to take responsibility as leaders. I do not think it is fair”.

    Kuru said that by 2023, AMCON should have ceased to operate after its 10-year mandate expires. “Frankly speaking, personally, I feel that by 2023, regardless of whatever is the situation, AMCON should wind down because if after operating for 10 years, in addition to two to five years when the facilities were in the commercial banks, you did not do anything, then there is nothing you can do by 2020. So, at that stage, I believe that what we should be able to do, if we have any outstanding collaterals that were not realized, I think, we have enough facilities in CBN and NDIC to  take care of that.”

    AMCON Executive Director, Aminu Ismail, said the corporation posted a loss of N16.4 billion in 2017 from N164.9 billion in 2016.

  • AMCON takes over Stella Oduah’s assets over N20bn debt

    Hon. Justice M.S. Hassan of the Federal High Court, Lagos Division has granted an injunction against Sea Petroleum Oil & Gas Limited, whose chief promoter is former Minister of Aviation, Senator Stella Oduah-Ogiemwonyi, on the application of Asset Management Corporation of Nigeria (AMCON).

    Oduah-Ogiemwonyi, a serving member of the 8th Senate of the Federal Republic of Nigeria, has been having a running battle with AMCON over her inability to settle her huge debt of nearly N20 billion.

    AMCON purchased the Eligible Bank Assets (EBAs) of Sea Petroleum & Gas Limited from Union Bank Plc sometime in 2012. But despite the overtures and genuine efforts made by AMCON to reach an amicable settlement, the Senator and her co-promoters have remained adamant.

    Having exhausted all avenues of peaceful resolution of the huge debt, AMCON referred the matter to court.

    The order also affects Oduah-Ogiemwonyi’s other business interests for which AMCON has since appointed Moyosore Jubril Onigbanjo, SAN as Receiver over the assets of Oduah-Ogiemwonyi; Sea Petroleum Oil & Gas Limited; Sea Petroleum and Gas FZE as well as Star Tourism and Hotels Limited.

    The court also ordered the freezing of the funds of Sea Petroleum & Gas Limited and its affiliated companies and principal promoters held anywhere by any entity or persons in Nigeria and authorised AMCON and its Receiver, Moyosore Jubril Onigbanjo, SAN to take over all assets pledged as collateral for the facility by Sea Petroleum Oil & Gas Limited.

    Justice Hassan specifically ordered Sea Petroleum Oil & Gas Limited and its affiliated companies to hand over the company’s business, which sits on over 9000 square kilometres of land in the fastest developing area of Lagos State along the Lekki-Epe Express Way; two tank farms of 500 metric tonnes capacity; a property at Maiyegun Tourism Zone, Lekki Peninsula Scheme 11, Lagos Island and a filling station complex at Kkilometre 14, Lekki Epe Expressway, Ikota, Lagos State.

    The court order also listed a host of other assets across the country including Plot 2, block 12C, Babafemi Osapa Crescent Lekki, Lagos State; Block 5, House 4A Mobolaji Johnson Estate, Lekki, Lagos State; Office/filling station at Jakande, Lekki, Lagos State; Office complex 1, 2 and 3, Km 14, Lekki-Epe Expressway, Ikota, Lagos State; filling station complex at Km 14, Lekki-Epe Expressway, Ikota Lagos State; staff residential quarters, Ikota, Lagos State; E25-E36, Gat Oboh Drive, Millennium Estate, Oniru, Lagos State and F3-F5, SPG Road, Millennium Estate, Oniru, Lagos State.

    The rest include, SPG Agungi 2 Lekki Lagos State; office/filling station complex at Funmilayo Ransome Kuti, FCT, Abuja; Gas plant at Karu, FCT, Abuja; filling station complex, Lugbe, FCT Abuja and Agriculture Farm at Kuje, FCT Abuja.

    In compliance with the order of the court, AMCON through its Receiver, Moyosore Jubril Onigbanjo, SAN, at about 11 am yesterday, simultaneously took possession of the assets of Sea Petroleum & Gas Limited and its affiliated companies.

    The court, in granting the injunction, ordered the Inspector-General of Police, Assistant Inspector-General of Police and the Commissioner of Police in charge of Lagos State, their deputies and all other police officers under them to assist Moyosore Jubril Onigbanjo, SAN, the Receiver and the Bailiffs of the Federal High Court in the enforcement of the orders.

    AMCON under Ahmed Kuru, Managing Director/Chief Executive Officer, has maintained that there will be no sacred cows in its bid to recover the huge debts in the hands of a few Nigerians.

    To deal with the situation however, AMCON has in recent times increased the tempo of its recovery activities, using firmer negotiation strategies as well as utilising the special enforcement powers vested by the AMCON Act to compel some of its recalcitrant debtors, especially those that are politically exposed and business heavyweights, to repay their debts.

  • Save us from AMCON, Suru Group cries out

    Chairman of Suru Group Edward Akinlade has cried out over desperate attempts by Asset Management Corporation of Nigeria (AMCON) to dispose Best Western Plus Hotel on Allen Avenue Ikeja, Lagos at a giveaway price after sealing it without due process.

    He called on the federal government as well as concerned stakeholders to come to the group’s rescue.

    Akinlade, who described AMCON’s activities as illegal and fraudulent told reporters last week in Lagos operatives of AMCON stormed Best Western Plus Hotel on September 22, 2017, forcefully ejecting staff and customers despite a court injunction against the action.

    AMCON has been battling the group over allegations of owing the defunct Oceanic Bank Plc (Ecobank) N15.3billion, a claim Akinlade dismissed as untrue.

    “In 2014, AMCON sued us, saying that we owed them N15.3billion but the suit was dismissed by Justice M.B Idris and the sum of N50 was awarded as cost in favour of our company but AMCON still went to another court and sued us again as counter claim,” he stated.

    Akinlade pointed out another judgment by Justice M.S Hassan on March 22, 2018 in the group’s favour, stating that the “counter claim is an abuse of judicial process, it seeks to relegate issues that have been determined by the court, it is an attempt to restore Suit No FHC/L/CS/218/2014, which has been dismissed by this court on 22/6/2015.”

    He went on: “But by the judgment we had in March this year, the court said we do not owe AMCON and therefore it cannot seize our property but as at today, AMCON is still sitting in our property at Allen. They have Mobile Police there every day.”

    The Suru Group boss alleged AMCON is plotting to sell the hotel at N1.9billion without due process.

    “As we speak, AMCON is making arrangement through a receiver to sell that hotel for about N1.7 billion naira, a property worth N6 billion despite of a judgment.

    “Whereas the court says, it is not your property but AMCON wants to sell the property using a fraudulent legal mortgage,” he alleged.

    He therefore called on the federal government as well as relevant authorities to come to his rescue, adding, “AMCON is committing fraud and judicial recklessness against our company. So we are calling on the Federal Government to intervene and call AMCON to order.

    Lamenting the many losses of the hotel, Akinlade said: “It makes on average about N900 million every year but right now we are making no money.

    “Secondly, we had a Best Western franchise but right now, Best Western has withdrawn its name from the hotel because under the agreement we had once a hotel is closed for three months, they would remove their name.

    “So there is no more Best Western Plus, Ikeja. We have lost that too.

    “When the hotel was functioning, it was valued at N6.2 billion but now AMCON is saying it is valued it at N1.9billion.

    “So there has been substantial loses including the loss of our reputation.”

    He lamented several household items, equipment and properties of the hotel have been ruined since it was sealed.

     

  • AMCON: Change as antidote to bad debts

    Nigeria’s banking sector was embroiled in bad debt – or their more fashionable name of nonperforming loans (NPLs) – back in the calamitous period of 2008-2009. Then, not only Nigeria but other nations of the world were submerged in the deluge of the infamous financial tsunami called meltdown, with the epicentre traced to US mortgage re-financing marketplace.

    Nigeria’s response was quite innovative – the establishment of Asset Management Corporation of Nigeria (AMCON) with mandate to mop up the NPLs from the banks and stabilize the economy in 2010.

    Evidence that the root cause has not been adequately addressed is provided by the fact that NPLs are not only now on the rise again, but also at an alarming rate.

    At the risk of encouraging growth of bad loans, AMCON has stopped taking in fresh NPLs from around 2013. Doing otherwise would amount to a reversal of the raison d’être for its establishment. But loans are the lifeline of modern business financing. They are inevitable and inversely a part of the many challenges AMCON is facing in executing its mandate.

    Another challenge is the spiraling interest on NPLs, which is making the whole work of AMCON a more daunting task — the case of shifting the goal post in the course of a match! But the key challenge of fighting bad debts remains the attitude of the obligors and the sluggish judicial processes. Added to our not so rosy economic situation, the bleak picture of the task of recovering the bad debt as onerous task is complete.

    The attitudinal dimensions to fighting bad debts were brought to the fore by AMCON Managing Director and Chief Executive Officer, Ahmed Lawal-Kuru, during a recent interview with the press. Hear him: “The challenges that we currently have are in two folds: the first has to do with willingness and ability; the second has to do with the state of the economy.” The former borders on attitude of the obligors and, before them, that of the bank directors and management, who allow infractions to subsist; the latter has to do with our economy and all its vulnerability to global market price fluctuations.  The two infractions that always lead to NPLs are insider dealings (bank directors approving loans for themselves) and poor structuring of the loan facilities in the first instance.

    Psychologists define attitudes as a complex combination of things we tend to call personality, beliefs, values, behaviors, and motivations.

    As for the two infractions highlighted above, bank managements need to encourage risk management training, which will help staff responsible for negotiating facilities do a good job of professionally structuring the facilities so that nothing goes wrong when it comes to recovery. The tendency to promote only the staff members bringing in the fattest accounts to the bank to the detriment of those in the risk assessment department, for example, tends to stack the top hierarchy of our banks with people not well grounded in risk assessment to professionally structure facilities that go out of the banks.

    It is the height of corruption for directors to take loans from their own banks.  To AMCON boss, “For good corporate governance, you should not take a credit from an institution that you sit on its board. You cannot give yourself contract from the agency that you superintend. It is simple logic and that is best practice. Before, when things were okay, we said the only requirement was to declare an interest. But we should go farther than that — you should not even take. If you are a director and responsible and you believe in the viability of your project, go and market it to another financial institution as there are many around but not the one you superintend over.”

    Despite all these challenges, the management of AMCON headed by Ahmed Lawal-Kuru is surging ahead. A humble leader, Kuru has decided to make his actions speak louder than voice. With about N300billion in debt recovery so far, the Kuru is bringing to bear his vast experience as a risk management expert. Back at the defunct Bank PHB, risk management, compliance, commercial banking, public sector financing, and multilateral agencies of the bank were under his purview as an executive director.

    With three years to go out of the 10 years target period given to AMCON to achieve its key objectives, nothing short of a miracle will see it accomplish them. But Kuru is not about to give up. Instead, he is trying his best to churn out strategies that will help AMCON meet it mandate. For example, this year, the corporation’s focus is to create relationships so that it can package related businesses and attract foreign investors as well as discuss with them how to take over some businesses, especially in the areas of power, oil and gas. The plan is to repackage these businesses and assets so as to attract third party interests. The AMCON -MD/CEO is cashing on the silver lining appearing on the horizon now; our foreign reserve is going up, foreign exchange is stabilizing, and other indicators are becoming more positive for investors to come in. And the targeted investors Lawal-Kuru is eying are those long-term vision and objective and he confessed to the press that “quite a number of them have shown interest; we are currently working on how we can partner with them.”

    It is on record that, as an institution, AMCON has taken acquisition of over 13,774 NPLs worth N3.6 trillion from 22 commercial banks in Nigeria and provided financial accommodation of N2.2billion. It has protected about N4.7trillion worth of depositors’ funds and interbank takings, as well as saved approximately 14,000 jobs. Of course, no one can deny the fact that, through the efforts of AMCON and other strategic stakeholders, the federal government has successfully managed our debt crises and saved our banking system from imminent systemic collapse. But this achievement will not be complete until bad debts are recovered in the interest of the public, whose taxes were used to purchase them.

    In all these, the attitudes of obligors, bank managers and our judicial officers need to significantly change for Nigeria to become investors’ destination in Africa.

     

    • Hassan is a financial analyst based in Abuja
  • AMCON: Poor valuation stalling sale of assets

    AMCON: Poor valuation stalling sale of assets

    The management of Asset Management Corporation of Nigeria (AMCON) has blamed its inability to dispose the assets under its custody on poor valuation by prospective buyers.

    Thus the management has advocated gor ‘AMCON Market,’ which it said would involve key players in valuation, insurance, legal among other strategic stakeholders.

    AMCON has a stockpile of assets, which it is finding difficult to dispose in the regular open market. The assets cut across critical sectors of the economy such as real estate, energy, transportation and aviation, maritime, agriculture and manufacturing just to mention a few.

    Dr. Eberechukwu Uneze, an Executive Director with AMCON made the call while declaring open a one-day sensitisation forum for AMCON’s Valuers & Receiver Managers in Lagos. The conference is part of AMCON’s renewed strategy to continually engage different professionals whose practice directly impact on its recovery activities. The conference is themed “Valuation of AMCON assets: The Imperatives of Competence, diligence and commitment.”

    Dr. Uneze, who represented the Managing Director/Chief Executive Officer of AMCON, Mr. Ahmed Kuru, said the creation of the proposed AMCON market would help address a lot of irregularities that affect the outcome of valuation in the country. He said, “We are using this opportunity to appeal to the conscience of valuers to the realities and the negative implication of wrong valuation to the recovery effort of AMCON. When you carry out this assignment as valuers especially when it relates to AMCON assets, please make use of the appropriate methodology. When you are appointed as valuers for AMCON please don’t just look at it as a business; kindly consider it as a national assignment because we owe it a duty to Nigerians to recover these debts as quickly as possible because AMCON is not here in perpetuity. Your contribution would help strengthen the hands of AMCON to enable the corporation realise its mandate.”

    He said again, “The feedback we get from some of our key stakeholders is not palatable. Some of them have come to us with the allegation that some obligors go to the extent of trying to influence the decision of some valuers. That is very wrong. Such sharp practice would not help our recovery mandate. It is also not good because the money AMCON is recovering belongs to Nigeria. That is why we are calling for the creation of an AMCON market because the implication of the outcome of your valuation has very huge impact on our mandate.”

    In his own contribution, Chief Mike Igbokwe SAN, called on the leadership of AMCON to engage only tested valuers with the required expertise to be able to do the right job, which he said would help the corporation in its recovery efforts. He however cautioned firms that are into the business of valuation to be professional in their approach as whatever valuation reports they carry out can also be tested by other firms, which could rubbish the image of such a valuation firm that submitted unprofessional report that did not follow proper methodologies ab-initio.

    The conference also featured presentations and contributions from Mr. Nosa Aisedion, AMCON’s Head of Valuation and Insurance; Mr. Aliyu Kalgo, Head of Asset Sales, AMCON; Mrs. Iyatum Adode Kobiti, Group Head, Corporate Services and Mr. Sulaiman Abdul Majeed, Head, Energy Department. Others include Prof. C.K Agomo of the University of Lagos; Mr. Talmiz Usman; Mr. Ralph Opara, past president Institute of Loss Adjusters; Prof. Bioye Aluko of Obafemi Awolowo University and Mr. Osy Chijoke Kamalu of Osy Kamalu Associates, just to mention a few.