Amended AMCON Act: Taking Recovery To The Next Level

AMCON MD/CEO, Ahmed Lawan Kuru (ALK), stressing a point during one of his meetings with ICPC in Abuja
By Bashir Ibrahim Hassan
There has been noticeable rise in positive responses from obligors since constituting the task force on recovery of AMCON debt under the office of Vice President Yomi Osinbajo SAN and the subsequent signing of the Asset Management Corporation of Nigeria (Amendment No. 2) Act 2019 by President Muhammadu Buhari, which gave the committee the teeth to bite, last month.
Finally, the jinx is broken at AMCON, so to speak. Now the corporation is singing a new melody. It is a far cry from the singsong of yesteryears; of complaints that it was finding it so difficult to get its obligors to honour their obligation by paying their outstanding debts.
No doubt the amended law is working; big names are coming forward with genuine commitment to repay their debt and indeed paying. Donald Duke, former Governor of Cross Rivers State, it was reported, is one big name that recently paid up his debt. AMCON had gone to court and obtained an order of the court to enforce on the ex-governor’s choice Ikoyi property over a huge debt of over N500million, which has now be resolved as reported in the media.
What has changed significantly since the signing of the new law is the speed with which the High Courts are responding to AMCON’s application to take over the properties of recalcitrant obligors. Before now, all manners of judicial technicalities delayed the processes thereby slowing the pace of recovery.
Another interesting fact is the amount of powers the Law gave AMCON. For example, the amended Act empowers the recovery agency to access the financial details of debtors. It empowers AMCON to by-pass any legal or procedural restriction, specifically those protecting banking details of debtors, and get unhindered access to their bank records. The agency can now place bank accounts of debtors under surveillance and can now establish the location of debtors’ funds at home or in the Diaspora. The law also empowers AMCON to furnish government Ministries, Departments and Agencies (MDAs) with a list of debtors and advises government not to do business with such defaulting companies.
One of the earliest tests of the law was the case of Dr. ABC Orjiako, the chairman of SEPLAT Petroleum Development Company. A Federal High Court in Abuja presided by Justice Taiwo Taiwo granted AMCON’s application to take over large portions of his assets of the Chairman in addition to granting order to AMCON to take over of the assets of two of Dr. Orjiako’s affiliate companies, Shebah Exploration & Production Company Limited and Allenne Limited. The court order affected all movable and immovable assets of the two companies, including the oil production facilities and other assets belonging to Shebah Exploration & Production Company Limited and located in and around Ukpokiti Oil Field. The court order, issued on August 15, was accompanied with the letters to the Managing Directors of over 20 commercial and merchant banks in the country where Dr. Orjiako and his allies have accounts.
The court order gave the Receiver/Manager of AMCON judicial protection to take over the assets of Shebah Exploration and Production Company Limited for the purpose of liquidating its outstanding indebtedness to AMCON.
The wrath of the law is seen in the way the court order not only authorized the AMCON to take over the assets of the companies but it also authorized the Receiver/Manager to take over Dr Ojiako’s property in Parkview Estate, Ikoyi, Lagos, and Maryland in the United States as well as London, United Kingdom.
These blitzkriegs have shocked and awed the obligor community in Nigeria and beyond and has since sent them running to AMCON with genuine out-of-court settlement propositions. It seems the amended Act came along with the long-awaited tonic needed to recover from the feverish hold of the obligors, whose total obligation is more than what Nigeria has borrowed from world financial institutions in recent past.
Until the signing of the new law, the names of the individual behind the N5 trillion debt portfolios were almost held in secret. Today such names can be published. Their cover has been blown. Today we know the details of persons and companies owing the nation some N5 trillion. We even know that 20% of the defaulters owe 65% of the money in question. Nigerians are grateful to AMCON and the Federal Government for starting the debt recovery blitzkrieg from the top 20 debtors. The law that was drafted to guard the powers that be has been amended to work for the interest of the Nigerian populace.
Pampered individuals lurking in corridors of power are no longer untouchable.
Lest we forget, the debtors AMCON is dealing with now have passed through all the three stages of a normal debt recovery process. They failed to settle their debts with their initial creditors’ internal collectors (bank loan recovery teams) referred to as first-party agency, which is the first stage in the process. The second stage is when a third party is introduced to play the role of debt collector. The third stage is for the original creditor to write off the debt and sell it, which is where AMCON came in.
AMCON has acquired the Non-Performing Loans of the banks using tax payers’ money; so, it is in the national interest that it recovers these loans from the debtors and in such a way that it can return profit on its purchase. To do otherwise would be to short-change toiling Nigerian tax payers.
Part of the AMCON’s mandate is to assist eligible financial institutions to efficiently dispose of eligible bank assets; efficiently manage and dispose of eligible bank assets acquired by it; and obtain the best achievable financial returns on eligible bank assets or other assets acquired by it. In the course of implementing its mandate, AMCON has bought huge toxic bank assets and injected huge amounts of funding to save the country’s financial system from systemic collapse. But its successes in stabilizing the financial system will not be fully celebrated until it is able to recover those debts owed it by individuals and companies.
The management at AMCON is up to the task of this gigantic debt recovery, no doubt. The MD/CEO, Ahmed Lawan Kuru (ALK) and his management team, with the support of the Board, have been taking the corporation to greater heights. What started as a strategy to use the powers of other financial crime institutions has now quickly metamorphosed into renewed fighting powers for AMCON through the Asset Management Corporation of Nigeria (Amendment No. 2) Act 2019. So far the Federal Government has displayed the required political will needed for the debt recovery efforts must succeed and the judiciary is in concert too.
The debt recovery effort has a positive multiplier effect as we have started seeing from the news that last month AMCON refunded N282.5m to the Zamfara State government after property belonging to the state were auctioned in a move to recover debts owed by the former governor, Abdulaziz Yari’s administration.
The multiplier effect should be double-aged. While people like Governor Matawalle of Zamfara are happy with the results of recovery efforts, AMCON should also be concerned with determining whether there was foul play with bank officials in the approving the loans that turned out to be non-performing in the first instance. Criminal connivance should not be ruled out in such matter. Deliberate over valuing of collaterals is a common feature of non-performing loans years after they have been approved. And where such deliberate breaches of risk management protocols are established, penalties should be meted on the culprits to serve as deterrence those currently in the system.
With the amended AMCON Act in force, and from what we have started seeing of its implementation, especially by the courts of competent jurisdiction, very soon the table will turn for common good.
From all indications, it does appear the past years that AMCON suffered lean recoveries due to “recalcitrance” on the part of the obligors will soon give way to one astonishing fat year. This is because the over N1.2 trillion recovered during its years in existence will give way to N3.8 to be recovered in less than one year. When that happens, it will be the most phenomenal debt recovery effort ever seen in Nigeria’s history.
*Hassan is financial analyst wrote from Abuja

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