Senate backs AMCON’s plan to publish debtors list …Proposes Executive Order to seize debtors’ assets
Senate President, Dr. Bukola Saraki
BY FRANCIS EZEM
The Senate, Nigeria’s upper legislative chamber has thrown its full weight behind the Asset Management Corporation of Nigeria AMCON over its plans to publish names of chronic debtors, in what the asset recovery agency described as name and shame tactics of recovering public debts.
Available records show that 350 loans valued at over N4.8trillion still in the books of the corporation constitute about 80 per cent of the entire 14, 000 loans it purchased, which it insists must be pursued at all cost albeit legally, including publishing names of these chronic debtors, who constitute the high and mighty in the society.
Chairman, Senate Committee on Banking, Insurance and other Financial Institutions, Senator Rafiu Adebayo Ibrahim, who spoke at the ongoing two-day retreat on the amendment of the AMCON Act in Lagos, Thursday said that Nigeria can be made great again, if the legislature as a matter of urgency empowers the AMCON to go after recalcitrant obligors. He said that is the only way AMCON can meet the tough mandate for which it was set up about eight years ago.
The Senator, who delivered a keynote address, hinted that the upper chamber, as part of its oversight function, has decided that AMCON at this critical time in its lifespan must be given all the support it requires to perform as expected by all Nigerians. He however urged the Management of AMCON to collaborate with the Federal Ministry of Finance, the Central Bank of Nigeria CBN and the office of the Attorney General of the Federation to propose that President Muhammadu Buhari should issue an Executive Order on seizure of assets of persons who are indebted to AMCON.
According to him, AMCON over the past seven years has done its best to resolve these debts but is still faced with stiff resistance from the obligors, the 8th Senate of the Federal Republic of Nigeria under the able leadership of Senator Bukola Saraki, would have no option than to urge AMCON to compile and publish the list of all these debtors on major daily newspapers in the country. The move, he argued would place before Nigerians those who are holding the nation’s economy to ransom since they account for 80 per cent of AMCON’s N4.8trillion obligation.
“The upper chamber is planning serious discussions with major stakeholders such as the CBN, the Ministry of Finance, the Nigerian Deposit Insurance Corporation NDIC and relevant committees from the legislature among others, as soon as possible where issues hindering AMCON from performing optimally including the funding model of AMCON would be discussed to enable the recovery agency of the Federal Republic of Nigeria finish its assignment on a high.
“The Senate will at this stage bare its fangs by amending the AMCON Act because AMCON has been a key stabilising and re-vitalising tool in the Nigerian financial system and so will be supported by the legislature to enable the Corporation achieve its statutory objectives. The legislature therefore supports the proposed plan by AMCON to publish the list of especially the 350 obligors that accounts for nearly 80 per cent of the total huge debt of AMCON”, he said.
Managing Director/Chief Executive Officer, AMCON, Mr. Ahmed Kuru, had while speaking at the event, reminded the Senate Committee that the ramifications for failure by AMCON to recover its debt, principally owed to the CBN, cannot be quantified as it goes beyond economic cost. He disclosed that AMCON’s total debt obligation of N4.8trillion represents more than 55 per cent of the 2018 national budget. Given the current demands on the Federal Government therefore, Kuru said he is convinced that it is doubtful that the government can afford to expense AMCON’s debt in the short term.
Kuru said: “It was for that reason AMCON, after seven years of negotiating with the obligors with no commensurate recovery result, has decided to change its strategy, which now pays strict attention to enforcements as a way of compelling especially the recalcitrant obligors to come and pay up their debts. To achieve this, the corporation will heavily depend on the legislature, most especially members of the committee to facilitate the amendment of the AMCON Act 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.
“One of the major areas for amendment is the matter of vesting proprietary interest of all collateral assets acquired by AMCON from commercial banks. The proposed amendment will have retrospective effect. The vesting of proprietary interest of all collateral assets in the resolution vehicle was implemented in Malaysia and was instrumental to their success in recovering debt obligations.
“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, which 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.”
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. Throwing more light on this, the AMCON boss said, “To clarify, obligors indebted to AMCON 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.”
For that reason, he informed that AMCON had presented the issue with 350 accounts that represent about 80 per cent of AMCON’s current exposure of N3 trillion as at May 31, 2018. AMCON, he said is still grappling with the issues that are multi-faceted, which consequently led the corporation to reposition its debt recovery approach to focus on enforcement against obligors who are not willing to settle amicably.
“I will like to emphasise, once again, that the ramifications for failure by AMCON to recover its debt, principally owed to the CBN, cannot be quantified as it goes beyond economic cost. AMCON’s total debt obligation of N4.8trillion represents more than 55 per cent of the 2018 national budget. Given the current demands on the Federal Government, it is doubtful that it can afford to expense AMCON’s debt in the short term”, the MD also said.