The Managing Director/Chief Executive Officer of Asset Management Corporation of Nigeria, Mr Gbenga Alade, has called on the judiciary to speed up the judicial process on AMCON-related cases within the 60 to 90-day timeframe stipulated by the AMCON Act.
He said this is crucial to the corporation’s success in recovering billions of naira in outstanding debts.
Alade made the call at a stakeholders retreat with the Senate Committee on Banking, Insurance, and Other Financial Institutions on Saturday in Lagos.
“We have more than 3,000 cases in various courts around the country; from the court of first instance to the Supreme Court. We have continued to deepen our interaction with the leadership of these courts. We hope that AMCON cases would be adjudicated within the time limit enshrined in the AMCON Act,” he stated, underscoring that they are not seeking anything beyond what the law stipulates.
He implored the senators to continue to assist in raising awareness among government agencies about the risks associated with engaging with debtors (contractors) who have outstanding liabilities with AMCON.
Despite initial challenges, Alade reported significant progress in recoveries, with AMCON having recovered approximately N2.01tn to date. This figure comprises 44 per cent in cash recoveries and 56 per cent from the sale of proprietary assets, clawback, and repurchases, among others.
However, AMCON faces a critical juncture, with opinions divided on its future. Some advocate for its winding down, while others argue for its continued existence given the persistent challenges in the financial sector.
Alade expressed concern that a premature closure of AMCON could lead to a resurgence of non-performing loans and potential bank failures.
He said AMCON resolved to continue to pursue the recoveries of the debts owed by a few individuals who prefer to remain in courts than settle their debts.
“They believe that with the Corporation’s sunset date drawing closer, they will walk away free, and the debt will be added to the already overloaded domestic debt profile of the nation. We will not allow this to happen because taxpayers’ monies may be used to repay these debts.
“Only about 350 obligors make up more than 70 per cent of the entire debt profile of the Corporation. Some of these obligors still fly private jets, get government contracts, and continue to live lavishly in society.”
The Chairman of the Senate Committee on Banking, Insurance, and Other Financial Institutions, Senator Adetokunbo Abiru, in his comments, said the retreat provided an invaluable opportunity for senators to reflect on the critical role that AMCON has played in stabilising the financial sector and to chart the path forward in view of its sunset clause.
He “Admittedly, the setting up of AMCON has succeeded, to a large extent, in not only stabilising the banking industry given that the purchase of Eligible Banks Assets (EBA) reinjected the much-needed liquidity into the banking system, but also helped in restoring confidence in the financial sector.”
“Without any doubt, AMCON was established at a time of considerable turmoil, in the wake of the global financial crisis of 2008, to clean up the books of many ailing banks,” adding, “It can be said that as a result of AMCON’s interventions, thousands of jobs were saved as many banks were rescued from the brink of collapse.”
He noted that they must accept the reality that AMCON was not designed to be a permanent fixture in the country’s financial landscape.
“I am aware that the AMCON Amendment Act of 2021 extended the life of AMCON for another five years although it provides that the current tenor may be extended by a resolution of the National Assembly. So, we now stand at a pivotal moment where we must transition beyond AMCON as it is nearly impossible for the Corporation to recover substantial loans by 2026 when it is expected to wind down.
“Regrettably, despite 14 years of its existence, AMCON still carries massive loans in her portfolio put at circa N5tn with a significant portion of the AMCON debt due to the CBN. So, I expect that at this retreat, we should come up with more effective options for dealing with outstanding loans beyond the strategies already adopted, just like the Korea Asset Management Company.
“A major challenge remains how to recover the taxpayers’ money used to purchase the EBAs so they can be channelled to critical areas such as education, health, and the provision of infrastructure. This is against the backdrop of the fact that many businesses in Nigeria are currently battling economic headwinds, which make debt recovery efforts more difficult now than ever before.”
