• Declares N2trn Debt Recovery

• As Senate Committee Hints Extension of Corporation’s Dissolution

• Safiu Kehinde

Asset Management Company of Nigeria (AMCON) says over 3000 debt cases are still pending in court as it demands judiciary support for the quick recovery of the debts.

This was disclosed by AMCON’s Managing Director and CEO, Gbenga Alade, at the Stakeholders Retreat with the Senate Committee on Banking, Insurance, and other Financial Institutions held on Saturday at Radision Blue Hotel, Lagos.

In his address, Alade urged the judiciary to expedite the adjudication of AMCON-related cases within the 60 to 90-day timeframe stipulated by the AMCON Act.

He said that the judicial support in addressing AMCON’s extensive backlog of over 3,000 cases is crucial to the corporation’s success in recovering billions of naira in outstanding debts.

“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.”

Alade explained that AMCON’s recovery efforts are increasingly reliant on judicial efficiency.

“Our hope is 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, however, 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.

Meanwhile, Alade disclosed that AMCON made a total recovery of N2.011 trillion which comprised of 44 percent cash recovery 56 percent from sale of proprietary assets, clawback, and repurchases, among others.

Prior to that, Alade disclosed the Corporation’s purchase of eligible bank assets worth N3.8 trillion for N1.8 trillion as well as capitalization of three banks and provision of financial accomodations to five other banks.

“AMCON purchased eligible bank assets worth N3.8 trillion from 22 banks at the purchase price of N1.8 trillion.

“In addition to that, AMCON also capitalized three banks and provided financial accommodation to five banks in order to stabilize them.

“The total sum of N2.3 trillion was injected to the eight banks. And that brings the total of N4.1 trillion that AMCON disposed.

“Distinguished Senators, ladies, and gentlemen, till date, the Corporation has made recoveries of the sum of N2 trillion. Of the total recovery, cash recovery represents 44 percent while the other recoveries such as sales of properties, assets, and repurchases make up the remaining 56 percent.” Alade said.

He further disclosed that the corporation has successfully disposed of assets valued at around N651 billion since its inception, contributing to job preservation and business rescues across Nigeria.

Meanwhile the AMCON boss announced that from 2013 to 2023, the corporation has paid back N2.929 trillion loan to the Central Bank of Nigeria out of N4.1 trillion disbursed to it.

This included contributions to the Sinking Fund by other Deposit Banks and AMCON recoveries.

Alade, however, expressed concern that a premature closure of AMCON could lead to a resurgence of non-performing loans and potential bank failures.

“One wonders if any lessons were learned from activities of the past,” he said.

He held that 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 Corporation’s sunset date drawing closer, they would walk away free, and the debt will be added to already overloaded domestic debt profile of the nation.

“We will not allow this to happen because tax-payers monies may be used to repay these debts.

“As a matter of fact, 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 the society.” Alade added.

In his remark, the chairman of the Senate Committee on Banking, Insurance and other Financial Institutions, Sen. Tokunbo Abiru, hinted the possibility of extending AMCON’s dissolution, stressing that it impossible for the corporation to recover all substantial loans before the 2026 dissolution period provided in the amended Act of 2021.

He noted that the Corporation was established as an intervention agency to halt the drift caused by Non-Performing Loans (NPLs) in the banking industry with its adverse impact on savers and the entire economy.

“Admittedly, the setting up of AMCON has succeeded, to a large extent, in not only stabilizing 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.”

According to him, “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 that, “It can be said that as a result of AMCON’s interventions, thousands of jobs were saved as a number of banks were rescued from the brink of collapse.” He said.

Abiru, however, told the stakeholders that as they must accept the reality that AMCON was not designed to be a permanent fixture in the country’s financial landscape.

“I’m aware that the AMCON amended Act of 2021 extended the life of AMCON for another five years. That is riding of 2010 Act. Although it provides that the current tenure may be extended by the resolution of the National Assembly.

“We stand at a pivotal moment where we must transition beyond AMCON as it is near impossible for the corporation to recover substantial loan by 2026 when it is expected to wind down.

“For us in the committee of banking, insurance, and other financial institutions, I think part of what we will like to hear today and of course what this retreat will have to achieve is the possibility of how we can clean up.

“It is not as if we are going to put a strategy that will take people out of their job. But I think that what is important is that the exposure to Central Bank, we must have a way to clear it.

“Regrettably, despite 14 years in existence, AMCON still carryassive loans in her portfolio which is put at N3 trillion as gathered from the MD. But out there, I think it should be close to four or five.” Abiru said.

While addressing newsmen during the interview session, the Senate Committee chairman reinstated that AMCON supposed to be a temporary arraignment as it was globally established by several countries including Nigeria during the 2010 financial crisis.

The objective of its establishment, according to Abiru, was to save Nigeria’s deposits and ensure that the deposits are well secured, bringing out confidence in the financial system.

As contained in its 2010 establishment Act, AMCON was created for a period of ten years which elapsed in 2021.

The corporation’s lifespan would, however, be extended by another five year by the amended Act of 2021 in order to ensure substantial recovery of the country’s assets.

On if the body failed to meet up before the 2026 deadline, Abiru said an extension will be considered but must be definite, practical and realistic.

“Clearly, the idea of meeting is to come up with a strategy. Even if there is no time again and they could not meet up in 2026, at least when we are coming up with a strict that will give us a definite time that they can achieve this, an extent can be made.

“Clearly, we must be sure that whatever extension we are giving must be practical and realistic.” The lawmaker added.

On his part, Alade confirmed that similar establishments by other countries during the 2010 global financial crisis have rounded up.

He, however, decried unwillingness of Nigerian debtors to pay up as well as the number of pending legal cases in court which is frustrating the effort of the corporation to recover other assets on time.

Alade decried the judiciary’s reluctance to apply the amended AMCON Act and priortize the corporation’s issues, adding that there cases that have been in court for fifteen years.

“My Chairman mentioned the other time that some of the other places where this was set up at the same time, they have cleaned up.

“How easy is it to clean up debts in Nigeria? People don’t want to pay. In UK for example, if you borrow money with your asset, nobody goes to court.

“Once you cannot pay, they sell and realize their money. But it is not the same in Nigeria.

“I just told you for fifteen years, we have been on some cases in court. They are still in court! That doesn’t happen anywhere. It doesn’t happen in the US or UK.

“These people you see here, the Senators, they have made life easy. Because the amended Act gave AMCON so much power.

“Indeed they made the Act. But the question is the judiciary are not applying that here. That is why we are meeting with them. We have gone to the High Court, Court of Appeal, and Supreme Court, trying to bring them together.

“We want to have a retreat like this with them too so that they can understand what we are doing and help us to hasten up. They are there in the amendment Act but they are not yet doing that.” Ajayi added.

Meanwhile also present at the retreat are members of the Abiru-led Senate Committee which include of the Aminu Tambuwal, Mustapha Aliu, Nasiru Sanni, Isa Jibrin, Binos Yaroe, Abubakar Sani Bello, and the Senate Chief Whip, Mohammed Tahir.

AMCON Executive Directors which include, Shola Lamidi, Lucky Adaghe, and Aminu Mukhtar were also in attendance alongside other staffs and stakeholders of the corporation.