Asset recovery: National Assembly may amend AMCON Act
By FRANCIS EZEM
Strong indications emerged that the National Assembly may amend the Act setting up the Asset Management Corporation of Nigeria AMCON to give more powers to the corporation to enhance recovery of national assets.
Chairman of House Committee on Banking and Currency, Jones Chukwudi Onyereri, who gave the indications at the weekend, said that the House of Representatives, the nation’s lower legislative chamber is currently working towards amending the AMCON Act. He said the proposed amendment is designed to further empower and embolden AMCON to go after its debtors especially those who hitherto took undue advantage of some loopholes in the Act to perpetually engage the corporation in endless court cases.
The chairman spoke in Abuja at a one-day technical session with stakeholders including the Central Bank of Nigeria CBN, Nigeria Insurance Deposit Corporation NDIC and members of the House Committee on Banking and Currency; among others where the challenges inhibiting AMCON from recovering public assets were extensively discussed. The committee also used the occasion to listen to presentations from the representatives of the CBN, NDIC and legal practitioners among others on how AMCON could function optimally as well as meet its mandate.
Onyereri who chaired the technical session however reassured that the national assembly has also been monitoring the behaviour of AMCON obligors, which he said he was sad to state that some of the obligors are not just enemies of the state but those who do not mean well for both the economic efforts of the present administration and that of the Nigerian nation as a whole. He said that the national assembly would not leave any stone unturned until the AMCON Act is amended to speed up recoveries.
He said, “On February 20, 2018, we also held a public hearing on the AMCON Amendment Bill and during the hearing, we received a lot of inputs from stakeholders, invited guests and AMCON. Because of time limitation and the nature of submissions received at the public hearing, the committee felt that there is need to hold this technical session in order to give everyone involved the opportunity to properly analyse the Bill and give it the proper attention it deserves. This is why we have set-aside today for this technical session-dedication the entire day on this all-important Bill. This is an opportunity to once and for all set AMCON on a proper footing to effectively achieve its mandate.”
He reminded the stakeholders that AMCON was created in 2010 to assist the Nigerian financial sector achieve stability by buying toxic assets of Eligible Financial Institutions (EFIs); meaning that AMCON was not set up to exist in perpetuity as that would unwittingly create a moral hazard by giving banks in the country the erroneous impression that AMCON would always be there to bail them out.
According to him, going by the plans of the National Assembly, AMCON will have to end and must cease to exist at some point, saying that before it winds up, it needs to achieve its mandate within the defined lifespan. He said unfortunately, the debtors are also aware of this and are now doing everything possible to outlive AMCON, which according to him, the National Assembly would not allow.
“After eight years since the creation of AMCON, an appraisal of its recovery efforts is imperative, which is why the technical session was convened. The AMCON Act needs to be reviewed and amended in order to give it more bite to enable it go after recalcitrant debtors of the corporation. As I mentioned in my speech at the public hearing, there are certain loopholes in the extant Act, which are being taken advantage of by certain debtors and obligors to circumvent AMCON’s loan recovery efforts. There are equally other challenges being faced by AMCON in its loan recovery efforts both from EFI’s who fail to provide AMCON with necessary information and financial records of debtors to enable AMCON recover these funds and challenges from recalcitrant debtors who device all manner of ways to circumvent the law and frustrate AMCON.
“Therefore there is a need for paradigm shift in AMCON’s debt recovery efforts and this amendment would go a long way in achieving that. Let us be clear on this, there is deliberate reluctance and outright refusal by these debtors to settle their debts. Unless AMCON is given appropriate powers through legislation, it will not succeed. We need to remember that the Federal Government guaranteed AMCON’s bond. So unless something is done, this could be a source of economic instability in the country, as a default by AMCON on its debt will have an adverse effect on the country’s economy”, the chairman also said.
Meanwhile, Managing Director/Chief Executive Officer of AMCON, Mr. Ahmed Kuru, while speaking at the forum, described his assignment at AMCON as ‘very difficult’, but said there was need to change the recovery approach by the corporation with the backing of the National Assembly especially given that many of the debtors are defiant, recalcitrant, most of who are also business heavyweights who have the financial wherewithal to repay their debts but have refused to pay using the loopholes in the AMCON enabling Act.
The AMCON boss said, “We have been doing this for the past seven years and we have realised that what we need now at this time in the life of AMCON is legislative help that would make it possible to recover these debts effectively and efficiently. At AMCON, we believe that the Act establishing the Corporation can be amended as many times as possible by the National Assembly as long as they think it is appropriate to do so in the interest of the Nigerian economy. Given the difficulties we are facing presently, we are of the opinion that the Act establishing AMCON should be amended to reflect our sunset period.
“We are making this suggestion because we have over the years realised that some of our obligors have since established another lifestyle that are different from what brought them to AMCON so the best we can do as a law abiding agency of the government is take them to court. But the wheel of justice grinds slowly in the country so something drastic must be done if we all want AMCON to meet its mandate at sunset. So we suggest that the National Assembly amends the Act establishing AMCON in such a way that the assets of the obligors are automatically transferred to AMCON. From what we know, some of the obligors are working hard to ensure that the cases they have with AMCON in different courts outlive the lifespan of the corporation.”
The National Assembly, which in the first place created AMCON in 2010, Kuru argued must do everything within its constitutional powers to protect the corporation and pay more attention to its sunset to enable it fully recover the debts from the hard-core obligors who would stop at nothing to frustrate both AMCON, the National Assembly and the Nigerian populace.
Again Kuru said, “Our recovery assignment is a difficult one and in recent years business has been quite challenging in the country. For that reason, we are sitting on a lot of assets because of the unstable liquidity situation and as you know most of our assets are challenged one way or the other. But we are hopeful that things are looking up in 2018, meaning that AMCON’s projections look positive. However, we will continue to be prudent in terms of our spending and running cost generally. But at the end we will continue to insist that to meet our expectation at sunset, we do expect a lot of amendments of our Act as is from the national assembly. Once we have that backing, I assure you that AMCON would meet your expectations.”