The Senate on Thursday threw its weight behind the plan by the Asset Management Corporation of Nigeria (AMCON) to publish the names of its debtors.
A statement sent to PREMIUM TIMES on Thursday by AMCON spokesperson, Jude Nwauzor, said the Chairman Senate Committee on Banking, Insurance and other Financial Institutions, Rafiu Ibrahim, assured of the lawmakers’ support to go after recalcitrant obligors.
Mr Ibrahim noted that despite AMCON’s efforts over the past seven years to resolve the debt issue, it was still encountering stiff resistance from obligors.
“The 8th Senate under the leadership of Senator Dr. Olubukola Saraki would have no option than to urge Asset Management Corporation of Nigeria to compile and publish the list of all these debtors on major daily newspapers in the country immediately,” he said.
He noted that Nigeria could be made great again, if the legislature, as a matter of urgency, could empower AMCON to meet the mandate it was set up in 2010.
According to him, the move to publish the names of the debtors in the newspapers would place before Nigerians those who are holding the nation’s economy to ransom. They account for about 80 per cent of AMCON’s total N4.8trillion debt obligations.
The senator was speaking at the opening of a two-day retreat at Intercontinental Hotel, Lagos convened to discuss the AMCON Act Amendment Bill on Thursday.
He hinted that as part of the Senate’s oversight functions, decided that AMCON must be given all the support it requires to perform as expected by all Nigerians.
He however urged the Asset Management Corporation of Nigeria management to collaborate with the Federal Ministry of Finance, the Central Bank of Nigeria, and the office of the Attorney General of the Federation to propose that the President issues an Executive Order on seizure of assets of persons who are indebted to Asset Management Corporation of Nigeria.
In his opening speech, Mr Ibrahim said the Senate intends on have serious discussions as soon as possible with major interest groups like CBN, Finance Ministry, Nigerian Deposit Insurance Corporation and relevant committees from the legislature, among others.
He said issues hindering AMCON’s optimal performance, like the funding model of the corporation, would be discussed to enable the recovery agency finish its assignment successfully.
According to him, the Senate would try to amend the AMCON Act, because AMCON has been a key stabilizing and re-vitalizing tool in the Nigerian financial system, and so would be supported by the legislature to enable the Corporation achieve its statutory objectives.
He said the legislature would support the proposed plan by AMCON to publish the list of 350 obligors that accounts for nearly 80 per cent of the total huge debt of AMCON.
In his presentation, Managing Director/Chief Executive Officer, AMCON, Ahmed Kuru, reminded the Senate Committee the ramifications for failure by AMCON to recover its debt, particularly debt owed CBN, which cannot be quantified beyond economic cost.
The AMCON’s total debt obligation of N4.8trillion he said represented more than 55 per cent of the 2018 national budget.
Given the current demands on the federal government, Mr Kuru said he was convinced it was doubtful the government could afford to spend AMCON’s debt in the short term.
After seven years of negotiating with the obligors with no commensurate recovery result, he said AMCON decided to change its strategy, to now pay strict attention to enforcements as a way of compelling, especially the recalcitrant obligors to come and pay up their debts.
To achieve this objective, Mr Kuru said, the Corporation would be dependent on the legislature, especially members of the committee to facilitate the amendment of the AMCON Act.
He said since most obligors of AMCON that are politically exposed and business heavyweights now employ different antics in law to tie the Corporation up in courts.
Other challenges faced by the AMCON, Mr Kuru said, was one of the major areas for amendment was the matter of vesting proprietary interest of all collateral assets acquired by Asset Management Corporation of Nigeria from commercial banks.
“Our second challenge has to do with the disposal of assets due to the economic downturn. AMCON’s current assets under management (AUM), that is assets obtained from debt resolution, has a book value of N182 billion. We are unable to sell. Our ability to successfully divest these assets, at competitive market price, is severely hampered by several factors including valuation methodology, unperfected title documents, state of the economy, purchasing power.
The third challenge is the uncooperative attitudes of select obligors who are either unwilling and/or unable to settle their indebtedness. Such debtors prefer to resort to all manner of diversionary tactics as opposed to dealing with the problem of their indebtedness. It sees most of them are buying time, to where we do not know.”
Mr Kuru also stated that from all indications, AMCON has in the past seven years exhausted the low hanging fruits and have had to roll up sleeves for a drawn out battle because it has become harder to get obligors to settle their debts.
To clarify, obligors indebted to Asset Management Corporation of Nigeria for the sum of N1.3 trillion have sued us in various courts in Nigeria raising technicalities to avoid meeting their obligations. This has hampered our recovery efforts and our objective of obtaining the best achievable financial returns on assets acquired from the banks.”