The Chairman of House of Representatives Committee on Banking and Currency, Hon. Sir Jones Chukwudi Onyereri announced yesterday that the House of Representatives has begun the process of amending the Act establishing the Asset Management Corporation of Nigeria (AMCON), eight years after it started operation.
Hon. Jones Onyereri disclosed that the proposed amendment would further empower AMCON to go after its debtors, especially those that ride on some loopholes in the Act to perpetually engage AMCON in court.
The AMCON, a creation of the National Assembly in response to the global financial crises of 2008/2009, acquired over 12,000 non-performing loans worth about N3.7 trillion from 22 banks.
Out of this, AMCON injected N2.2 trillion as financial accommodation to 10 commercial banks in order to prevent systemic failure. This singular action, helped stabilize the financial system, protecting about N3.66 trillion of depositors’ funds; and saved approximately 14,000 jobs.
The task before AMCON now is the recovery of debts either through structured repayment or disposal of transferred assets towards settlement of the bonds.
Onyereri spoke at a one-day technical session with financial sector stakeholders in Abuja, where the challenges inhibiting AMCON from recovering debts were extensively discussed.
The committee also used the occasion to listen to presentations from the representatives of the Central Bank of Nigeria (CBN), Nigeria Deposit Insurance Corporation and lawyers on how AMCON could function optimally as well as meet its mandate before sunset.
Speaking at the forum, Managing Director/Chief Executive Officer of AMCON, Ahmed Kuru described his assignment at AMCON as “very difficult,” but said there was need to change the recovery approach at the corporation with the backing of the National Assembly, especially since the remaining crop of AMCON debtors are defiant, recalcitrant and business heavyweights.
He said the debtors have the financial wherewithal to repay their debts but have refused to pay by going to court to tie AMCON up.
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”.
He said the corporation has realised that some obligors have since established another lifestyle that are different from what brought them to AMCON. So, the best it 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 obligor(s) 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 AMCON.”