The Asset Management Corporation of Nigeria (AMCON) has about N5trillion unresolved loans and debts,no thanks to some of its high profile debtors, most of who are busy at the law courts setting legal landmines and hurdles for AMCON to cross. Ibrahim Apekhade Yusuf in this report examines the issues
Apparently wary of the frosty relationship existing between creditors and debtors, Benjamin Franklin, one of the founding fathers of America, noted rather sarcastically that, “Creditors have better memories than debtors.”
The foregoing becomes apposite in describing the current impasse between the Asset Management Corporation of Nigeria (AMCON) on the one hand and some of its high profile debtors on the other hand who are arguing matter-of-factly that they don’t owe the former prompting both parties to seek redress in the courts of law as a last resort.
Crux of the matter
At issue really is that about N5trillion debt is literally hanging on AMCON’s neck, a development, the Corporation considers a serious cause for concern.To make matters worse, these crops of debtors, as AMCON discovered too late, have proved to be hard nuts to crack judging by their blunt refusal to live up to their obligations.
No longer at ease with chronic debtors In a hand wriggling gesture, the Managing Director/Chief Executive Officer of AMCON, Ahmed Kuru had penultimate weekend regretted his agency’s inability to recover about N5trillion owed by bank debtors nationwide.
He noted that despite the overwhelming powers granted AMCON by the law setting it up, it is yet to record major success in the recovery of these debts because of the slow pace of court proceedings.
Specifically, he said over 3,000 cases involving it and bank loan defaulters were currently stuck in various courts in the country.
Kuru who spoke in Abuja at an interaction with Justices of the Court of Appeal, under the theme: ‘AMCON Regime: A paradigm shift in debt recovery,’ said, “Currently, there is still over N5trillion debts unrecovered. Over 3,000 cases relating to this debts are still undecided in the various courts.
“About 350 of our obligors (debtors) owe 80 per cent of the debts, 90per cent of the debt is held up in cases currently pending in the various courts,” he said.
Kuru, who prayed Justices of the Court of Appeal to come to his agency’s aid, canvassed for a special task force of the court to speedily consider and determine cases involving AMCON.
AMCON a clarion call obey
Responding, President of the Court of Appeal, Justice Zainab Bulkachuwa noted that AMCON’s mandate was herculean and critical to the continued survival of the nation’s economy.
Justice Bulkachuwa, who said her court will, within the limit of the law, support AMCON’s activities, noted that since debtors were reluctant to report their debts, AMCON must learn to be creative in its approach.
She said: “To recover as much debts as possible within its defined lifespan, expediency is essential if AMCON is to achieve its value maximisation and financial stability goals.
“Certainly, our court will be in a vantage position once the necessity surrounding the creation of AMCON, its revolutionary and unprecedented powers are appreciated by us,” she said.
Justice Bulkachuwa advised AMCON and its lawyers to learn to imbibe the spirit of “ingenuity, pro-activity, courage and dynamism” for them to accomplish the agency’s mandate.
On his part, former Chief Judge of the Federal High Court, Justice Ibrahim Auta said judges must show the patriotic responsibility to preserve the nation’s economy by ensuring speedy determination of cases involving AMCON.
Justice Mohammed Idris, who gave a detailed review of AMCON’s establishment Act, said the law gave overwhelming and unusual powers to the agency because of the circumstance that informed its creation.
He said, “Somebody will go to court and will not be talking about the debts, he will be talking about some entries in his statement of account. That will take us to the Supreme Court and that may take years. That is why we always make appeals for cases to be fast tracked.”
He noted that debtors usually take the advantage of the law which provides for rights of anyone to approach the court for review of debt issues.
“Unless the cases end, there is no way we can recover those funds,” he said.
Justice Idris, a judge of the Federal High Court, the court with exclusive jurisdiction to handle AMCON-related cases, said the court had given “purposive interpretation” to the AMCON Act because of the need to recover huge debts, to save Nigerian economy and the financial system.
Idris said, “There is N5trillion out there to be recovered. Most of the funds are owed by less than 1.5 per cent of Nigerians and these people have refused to pay. As far as they are concerned, nothing will happen to them. The economy must not fail and the financial system must not fail. This money must be recovered. If 1.5 per cent of Nigerians are holding the money, what happens to the remaining 98.5 per cent population?”
Making a case for AMCON
Expectedly, the Chairman of House of Representatives Committee on Banking and Currency, Hon. Sir Jones Chukwudi Onyereri at a public forum in Sokoto recently said that there was need for all institutions that want to see Nigeria get out of the current economic situation in the country to support the effort of AMCON to resolve the huge debt it carries insisting that its resolution was capable of rebounding the economy.
While attempting a prognosis of the debt crisis, especially recovery, Onyereri noted that the enormous task AMCON faces in its debt recovery efforts in the face of the current state of the economy, calls for support and cooperation of all.
“The current economic problem makes their (AMCON) harder but that notwithstanding, every debtor is obliged to pay their debt. AMCON therefore needs any assistance it can get in order to effectively fulfil its mandate.”
While promising that the committee will engage in in-depth analysis and discussions on major issues affecting AMCON and its operations, Hon. Onyereri however described the recent introduction of Asset Management Partners (AMPs) as a bold step in the right direction in the debt recovery effort. “At a time like this, debt recovery is a daunting and enormous task that requires you think outside of the box and come up with innovative ways of accomplishing the task within the ambits of the law. The collaboration with AMPs, which is a consortium of professionals with specialist’s skills in banking, legal, valuation and accounting, represents a new down in AMCON’s debt recovery efforts aimed towards strengthening the capacity for more recoveries.”
Echoing similar sentiments, a two-time former Attorney General of the Federation and Minister of Justice, Chief Kanu Godwin Agabi has called on judges in the country especially the ones that handle cases concerning AMCON and its debtors to pile pressure on the obligors to repay the huge debts, which he said was capable of revitalising the economy if recovered.
Agabi who spoke at the Judges Forum of the Federal High Court in Abuja, observed that the economy would have been worse but for the establishment of AMCON.
Insisting that the judiciary is the only arm of government that has the capacity to expand its powers to save a nation, Chief Agabi noted that the success and survival of AMCON so far was due to the hard work of the judges and the justice system because the law is what the judge says it is.
“If AMCON versus a debtor case comes before your Lordships, please I urge you to decide it decisively. It is a case of one man owing another man so it should not be difficult for you to decide. But then you cannot deliver as a judge if you are lacking in confidence.”
On his part, Prof. Chris Onalo, Registrar/Chief Executive Officer, Institute of Credit Administration (ICA) described as abnormal a situation where a few individuals owe up to as frightening and staggering as N5 trillion.
He was however quick to blame the credit managers for what he cited as dereliction of duties, as well as the judiciary for their complacency.
“I will choose to blame the credit managers in all the institutions where these individuals have borrowed the money; meaning that the cannons of credits was not strictly observed in terms of analysis to determine their credit reputation, in terms of credit monitoring consequent upon approval of those individuals and finally in terms of recovering the defaulted credits.”
