Criticisms: AMCON is conscious of its core mandate, insists Nwauzor
Asset Management Corporation of Nigeria AMCON has since its creation intervened in several sectors of Nigeria’s economy including the banking and transport, especially in aviation. These interventions have no doubt brought stability to the sectors in addition to saving thousands of jobs. In this interview with our correspondent, Head, Corporate Communications Department of the Corporation, MR. JUDE NWAUZOR, assures that AMCON would not lose focus of its core mandate of stabilising these critical sectors through loan recovery despite misguided criticisms.
At the last May Day celebration, labour unions in the aviation industry in particular alleged that AMCON has not invested the funds needed to revamp Aero and Arik, which they took over when the airlines were going under. Is that assertion the true position of things?
That is not and can never be the true position. In as much as AMCON will not join issues with the aviation unions or anybody for that matter, it is not good to mislead the general public with highly deceptive comments such as that. Thank God you said in your question that AMCON took over the airlines when they were going under. To begin with, if people can be sincere enough to look at things from a logical perspective, it takes money to keep something that is going under afloat. We know how capital intensive the business of aviation is so it is not possible to take over two airlines at the time we did without capital injection. It is not just possible. Recall that the time AMCON took over Arik for instance most of the aircrafts in its fleet were grounded, while others were on maintenance checks. There were backlog of unpaid salaries and all sorts of monies owed to other creditors among other factors. All that is history now because Arik has more aircrafts in its fleet, backlog of salaries paid and the airline is running very well. You cannot achieve all that without injecting funds. It takes funds to rehabilitate grounded aircraft and put them back into operations. We have also injected funds in Aero, and over the period, the story has changed to positive, which was why the airline recently upgraded its Maintenance, Repair and Overhaul MRO facility at the domestic wing of Murtala Muhammed International Airport in Ikeja, Lagos. In fact if you recall, they completed the first C-check on a Boeing 737-500 series at that facility earlier this year, in January to be precise. So it is wrong for the unions to make false assertions that cannot be substantiated.
If AMCON has done all these for the two airlines, why do you think some people still think your corporation has not done much for the airlines?
Maybe the people who hold such opinions are better placed to answer that question. But one thing I know is that AMCON has saved two biggest airlines in the country from going under. Nobody can ignore that fact. However, it is not yet uhuru because it is still work in progress for us and all stakeholders who mean well for Aero and Arik. However, we are also in a democracy and people are entitled to their opinions no matter how crude, unguarded, rude, uncut or misleading. You cannot shut them up. But a forward-looking management that I serve at AMCON is determined to deliver the best for Nigeria and Nigerians as far as our recovery mandate is concerned. Therefore they are not deterred by side comments, especially when it comes from armchair critics who do not know what it takes to manage a difficult business such as an airline. So AMCON does not respond to mischief-makers and armchair critics because we are focused on our recovery mandate, which is a very difficult assignment, so we do not have spare time for armchair critics. Having said that, I must add here that we are a transparently open organization whose activities are guided by law and we act and will continue to act accordingly.
In view of the progress made so far, when will Arik return to international routes, especially US and UK?
That is partly what I meant when I said it is not yet uhuru and it is still work in progress. Well I cannot give you a clear cut date of Arik‘s return to those destinations. That would be a serious business decision of management when the time is right. However, I am aware they weighing all the credible options and would make a strategic pronouncement in that regard, which I am sure will benefit Arik and all stakeholders when that decision is taken. I promise you will be the first to know.
Recently Managing Director/CEO of AMCON Mr. Ahmed Kuru made a strong case for the enthronement of strong corporate governance regulation and institutions in the country, especially for aviation industry. Is that an indication that AMCON is not planning to exit Arik and Aero soon?
I think it would be unfair to interpret his good intentions for the aviation industry that way. With our experience in the industry and the challenges that were discovered when AMCON intervened in the airlines, my MD was just calling on agencies that regulate aviation, which is a critical segment of the economy to go the extra mile by ensuring that players are guided by certain rules and regulations. His argument is that once we have strict regulation in that sector, it will be difficult for airlines to be ran aground as frequent as we have experienced it in the country over the years. In the last 20 years, I am sure we have lost count of the number of airlines that have gone under. If you have taken your time to read that speech, Mr. Kuru even proffered solutions when he suggested that they (aviation regulators) needed to make use of the same template the Central Bank of Nigeria CBN used and is still using to keep banks in Nigeria under check all year round.
Are you saying there are stronger corporate governance regulations in the banking industry?
Yes, very true. It may please you know that I was also privileged to have worked in the banking industry for eight years before joining AMCON. You cannot just do what you like; for instance all banks are expected to publish their financials at a particular time of the year, board meetings hold as at when due where major decisions are taken. In the banking sector before you hold certain strategic positions, the CBN gives you clearance so you cannot just appoint somebody because the person is your son-in-law. You also know that before you are granted a banking license to operate a bank in Nigeria you will be required to deposit certain minimum capital base with the CBN depending on the area you want to operate; be it regional, national or international. Aside the CBN, there is also the Nigeria Deposit Insurance Corporation NDIC on the other hand making sure that risks are minimised in banking operations. That is why you see that most banks in Nigeria are doing well because major risks are averted well ahead. If the aviation industry is regulated in the same strict sense the CBN regulates banks, airlines in Nigeria would flourish better than they are doing currently. That was the point the MD of AMCON was trying to make.
So when exactly will AMCON disengage from Arik and Aero?
The most important fact is that AMCON’s intervention in Arik and Aero has gone a long way in bringing stability to the two airlines. The move as you know ensured that the airlines continued to provide critical services to the public thereby contributing to the country’s growth. AMCON’s intervention in those airlines if I must say it again, was timely and vital to the economy and growth of the two entities. For me, and please this is my personal opinion, the question should not be about when AMCON would exit, I think Nigerians should be more interested in what would be of the airlines at the time of our exit. AMCON as far as you want to know have positioned the two airlines on the path to recovery and profitability with thousands of jobs both directly and indirectly saved. With the level of work we have done at the two airlines, the air travelling public attest on daily basis to the fact that there are remarkable positive changes at both airlines. I can also tell you that industry followers are impressed given the leadership that is currently provided at both airlines by Captain Ado Sanusi at Aero and Captain Roy Ilegbodu in Arik. Having said that, I want you to be rest assured that AMCON’s intervention in the airlines, which was by the way through the instrumentality of Receiver Management indeed stabilised the operations of the airlines. No doubt the development has put them in a position to generate positive cash flow, resolve their debt situations through either the owners paying the debts or the sale of the companies/underlining assets. Specifically, our intervention in Arik and Aero were intended to be value adding and non-destructive as I earlier stated. But on a lighter note, if you can settle the debts of the two airlines today, I am very sure we will exit almost immediately.