AMCON AND ASSET MANAGEMENT

AMCON plays a great role in stabilising the economy, argues Hussaini Hussaini

Asset Management Corporation of Nigeria (AMCON) as established by AMCON act 2010 (“the Act”) is a body that is empowered by the act to take over nonperforming loans from eligible financial institutions with an overriding aim of protecting shareholders interest in the eligible financial institutions. Section 5 of the AMCON Act provides thus: “The functions of the Corporation shall be to (a) acquire eligible bank assets from eligible financial institutions in accordance with the provisions of this Act; (b) purchase or otherwise invest in eligible equities on such terms and conditions as the Corporation, with the approval of the Board of the Central Bank of Nigeria, may deem fit; (c) hold, manage, realise and dispose of eligible bank assets (including the collection of interest, principal and capital due and the taking over or collateral securing such assets) in accordance with the provisions of this Act; (d) pay coupons on, and redeem at maturity, bonds and debt securities issued by the corporation as consideration for the acquisition of eligible bank assets in accordance with the provisions of this act: (e) perform such other functions, directly related to the management or the realisation of eligible bank assets that the corporation has acquired, including managing and disposing assets acquired with the proceeds derived by the corporation from managing or disposing of eligible bank assets acquired by it; (f) take all steps necessary or expedient to protect, enhance, or realise the value of the eligible bank assets that the corporation has acquired, including: (i) the disposal of eligible bank assets or portfolios of eligible bank assets in the market at the best achievable price, (ii) the securitisation or refinancing of portfolios of eligible bank assets, and (iii) holding, realising and disposing of collateral securing eligible bank assets; and (g) perform such other activities and carry out such other functions which in the opinion of the Board are necessary, incidental or conducive to the attainment of the objects of the corporation.”

In short, AMCON has the function of taking over non-performing loans from financial institutions that are eligible in accordance with the AMCON Act and the guidelines that section 24 of the said act empowers the central bank of Nigeria to “designate through guidelines any class of bank assets as eligible bank assets”. The function of AMCON is so much important to the Nigeria economy since through it, so many liquidities that have been taken by very powerful recalcitrant debtors are recovered. We may not understand the importance of this corporation, without touching the statistics of its challenges.

In a post on its website visited on February 12, 2018, AMCON stated thus :

“It would be recalled that 400 obligors of AMCON account for more than N4.5 trillion, which is approximately 80 per cent of the total outstanding loan balance of the corporation’s over twelve thousand accounts with obligors that have become recalcitrant over time despite obvious efforts of the corporation. To deal with the situation however, AMCON has 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.”

Studying the above statement, it is not likely that the above 400 obligors may be willing to surrender their assets for AMCON to manage and liquidate their debts back to the financial institutions on a platter of gold without litigation. Taking example of the popular case of Mr. Ifeanyi Uba’s Capital Oil and Gas Industries Ltd on which not less than five cases running around the Federal High Court, The Court of Appeal and the Supreme Court just on Capital Oil alone. On each and every case that is filed by or against AMCON, monies worth millions are expended on both legal and other consultancy services. This is the legal side of it alone. Think about the cost and troubles of the management of the said assets.

AMCON mostly goes against the “big boys”, hence, we shouldn’t expect their work to be easy despite their significance in protecting the nation’s economy. AMCON has in 2016 took over Sen. Ben Murray-Bruce’s Silverbird Companies and it has also taken over the property of former Captain of Super Eagles, Mr. Nwankwo Kanu’s Hardley Apartments, amongst others. These are people that have all machinery to fight the corporation with their full force and they are the type of people that constitute the above cited 400 obligors of AMCON.

Prior to the establishment of AMCON, the normal story was to the effect that so many huge debts owed to financial institutions usually become bad debts to the institutions which turn out to be a loss on the shareholders of those financial institutions and equally a setback to national economic development. The Nigerian banks’ failures may not be unconnected with the unfair financial dealings and borrowings that were prevailing under the old regime. This is why it is imperative that all hands must be on deck to support AMCON on this important course as we all are enjoined by well-meaning Nigerians such as Chief Kanu Godwin Agabi, SAN, whom while speaking at the Judges Forum organised by the Federal High Court in Abuja stated thus:

“I sincerely commend the Federal Government who thought it wise to establish AMCON to stabilise the Nigerian economy; if not for that wise decision, the economy of Nigeria would have been worse than it is today. I also commend the management of AMCON because of the enormous job they are doing to recover the country’s assets from a few debtors that have plundered the country and dragged our economy to where we are today. But AMCON cannot do this job alone, which is why the judges that handle AMCON related cases should pile serious pressure on the debtors to enable AMCON recover these debts”

In addition, the president of the Court of Appeal Hon. Justice Zainab Bulkachuwa also made similar appeal to judges and lawyers at a conference which was themed “Effective, Efficient and Expedient Discharge of Institutional Mandate’’, held at the headquarters of the Court of Appeal in Abuja.

Not only section 5 cited above, Sections 48 to 52 of the act also grant some special powers to AMCON with respect of appointment of receiver, custody and possession of debtors property; winding up of debtor companies among others.

THE FUNCTION OF AMCON IS SO MUCH IMPORTANT TO THE NIGERIA ECONOMY SINCE THROUGH IT, SO MANY LIQUIDITIES THAT HAVE BEEN TAKEN BY VERY POWERFUL RECALCITRANT DEBTORS ARE RECOVERED