There have been no buyers for the N182billion assets obtained by the Asset Management Corporation of Nigeria (AMCON) from debt resolution, the organisation said yesterday.
AMCON Managing Director Ahmed Kuru, speaking in Lagos at the two-day retreat on AMCON Act Amendment Bill, attended by members of the Senate Committee on Banking, Insurance and other Financial Institutions, said: “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”.
The AMCON boss said the N4.8 trillion bad loans owed to the corporation represent 55 per cent of the 2018 budget.
He said given the current demands on the Federal Government, it is doubtful that it can afford to expense AMCON’s debt in the short term.
Kuru reminded the Senate Committee on Banking, Insurance and other Financial Institutions that the ramifications for failure by AMCON to recover its debt go beyond economic cost.
“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,” he said.
To achieve this however, Kuru said the Corporation will be heavily dependent 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.
Further highlighting other challenges faced by the Corporation, the AMCON CEO, again said: “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”.
Chairman, Senate Committee on Banking, Insurance and other Financial Institutions, Senator Rafiu Adebayo Ibrahim, said Nigeria could be made great again, if the legislature empowers AMCON to go after recalcitrant obligors.
He described this as the only way AMCON coulod meet its mandate of achieving the tough mandate for which it was set up in 2010.
He hinted that the Senate,as part of its oversight functions, had decided that AMCON must be given all the support required to perform as expected by all Nigerians.
He urged the AMCON management 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 the President issue an Executive Order on seizure of assets of persons who are indebted to AMCON.