Buhari fires government bank’s top management team

It is an ‘enigmatic’ decision, because Amcon’s board had a mandate until November.

NIGERIA’S President Muhammadu Buhari fired the head of a government-owned bad bank set up to resolve a financial crisis five years ago, his second change of leadership of a key state company in a month.

Mustafa Chike-Obi, chief executive of the Asset Management Corporation of Nigeria, or Amcon, and a former Gold- man Sachs bond trader, was replaced on Tuesday by Ahmed Lawan Kuru, according to a presidential spokesman.

Kola Ayeye, Eberechukwu Uneze and Aminu Ismail were named as executive directors, taking over from Mofuluke Dosumu, Hewett Benson and Abbas Jega.

It is an “enigmatic” decision, because Amcon’s board had a mandate until November, said Bismarck Rewane, chief executive officer of the Lagos- based consultancy Financial Derivatives. Chike-Obi did not answer calls and Adesina said he did not know why Buhari changed Amcon’s management. Kuru was a former managing director of Enterprise Bank, which was owned by Amcon until last year.

“Amcon has a good reputation for competence,” said Rewane. “Chike-Obi’s very bright and highly-regarded.”

Buhari, who came to power in May after defeating Good- luck Jonathan in a campaign pledging to clamp down on corruption, appointed Emmanuel Ibe Kachikwu as group manag- ing director of the state-run oil company, the Nigerian National Petroleum Corporation, on August 4.

Chike-Obi ran Amcon since it was established in 2010 to buy non-performing loans as banks and the economy suffered from the oil price crash of 2008 and 2009. It bought more than 12 000 loans from industries including aviation, petrol marketing and manufacturing for about 1.8 trillion naira (R115.30 billion).

Amcon managed to collect or reorganise 57 percent of the bad debts it took on at a rate of 107 percent what it paid for them, Chike-Obi said in May.

Chike-Obi said in the same interview he did not want to offer banks another bailout, even as non-performing loans rose in response to the latest plunge in oil prices.

It may prove difficult for Amcon to maintain that stance, according to Rewane. – Bloomberg