Extending AMCON’s sunset date will promote corporate rascality-MD
BY FRANCIS EZEM
Asset Management Corporation of Nigeria AMCON has foreclosed any possible extension of its 2024 terminal date, saying that such extension might be counterproductive, as it may encourage rascality among some financial institutions including banks and other corporate organisations.
Recall that AMCON was created by the National Assembly in response to the global financial crises of 2008/2009 and therefore acquired over 12,000 non-performing loans worth about N3.7 trillion from 22 banks. Out of these, the corporation injected N2.2 trillion as financial accommodation to 10 commercial banks in order to prevent systemic failure.
This action helped stabilise Nigeria’s financial system, leading to the protection of about N3.66 trillion of depositors’ funds and about 15,000 jobs were saved. The idea was to recover the debts either through structured repayment or dispose of transferred assets towards the settlement of the bonds, within its projected 15-year life span.
Managing Director/CEO of the corporation, Mr. Ahmed Kuru, who gave this hint in Lagos, recently, spoke against the background of insinuations that the Federal Government might extend the corporation’s sunset date of 2024, a move he believes might not yield the expected results.
The MD, who had been a strong advocate of the enthronement of a regime of strict corporate governance regulations in the country among financial institutions, especially banks and other corporate organisations, which is currently lacking, believes that such extension might also send a very wrong signal, as it may make these financial institutions reckless, especially in terms of granting unsecure loans to individuals and firms.
According to him, beneficiaries of such loans comprising both corporate bodies and individuals might get even more reckless in handling the loan funds believing that there is a Federal Government’s agency or organisation (AMCON) that would ultimately takeover the loans as was the case in 2009, which almost led to the collapse of the nation’s financial sector.
He argued that the corporation, which he described as an interventionist agency and not profit making has achieved its core mandate of stabilising the nation’s financial market, which was at the brink of collapse, having saved over N3.3trillion depositors’ funds, more than 15,000 jobs thereby restoring confidence in the sector.
“If you ask me, I am of the sincere opinion that AMCON should wind down in line with its sunset date. This is because any issue we could not resolve in 15, it is most likely that it may not be resolved at all even if the terminal date was extended. Secondly and primarily, extending it might give a very wrong impression that would encourage rascality”, Kuru said while fielding questions from news men.
It was however gathered that the corporation is doing all it can to resolve most of the issues before its sunset date, as it is currently focusing attention on the recovery of 350 loans, which account for over 80 per cent of the 14,000 loans owed to the 22 banks.
In line with these efforts, AMCON changed its strategy since the former restructuring and resolution strategy it earlier adopted did not yield the needed results. Under the new strategy geared towards recovery, the corporation engaged the services of asset management partners to engender efficiency in the recovery processes.
The MD, who threatened to publish the names of the huge debtors as well as ensuring that there are barred from contesting elections or holding public offices, also assured that the corporation will henceforth be more ruthless albeit within the ambits of the law in its loan recovery efforts.