Justice Nnamdi Dimgba of the Federal High Court, Awka Division, at the weekend rose in strong defence of the Federal Government’s decision to set up the Asset Management Corporation of Nigeria (AMCON), and granting the agency some special powers to enable it to recover troublesome bad debts.
Justice Dimgba, spoke spoke at an interactive session organized on Saturday in Abuja, by the Legal Academy for Land Registry Officials, Corporate Affairs Commission, AMCON and other stakeholders.
He spoke in support of President Muhammadu Buhari, signed into law the Asset Management Corporation of Nigeria (Amendment) Act, amending the AMCON Act No.4, 2010.
The AMCON Act among other adjustments provides for the extension of the tenor of the Resolution Cost Fund (RCF), and grants access to the Special Tribunal established by the Banks and other Financial Institutions Act (BOFIA) 2020.
The Act confers on AMCON the power to among others… “take possession, manage, foreclose or sell, transfer, assign or otherwise deal with the asset or property used as security for Eligible Bank Assets (EBAs), and related matters.”
The Amendment Act has already attracted criticisms especially from the obligors and those sympathetic to them.
However, Justice Dimgba said the Federal Government needed to do whatever it takes within the ambit of the law to ensure that those individuals who are holding the collective commonwealth of Nigeria are made to return them to the government through AMCON.
According to him, supporting AMCON, which is what those that created the agency is doing and had done with the latest amendment of the AMCON Act is the only way to compel repayment.
He noted that AMCON is a ‘Special Animal’ created by the Federal Government to deal with a special problem, which started with the global financial meltdown that affected many economies of the world, including Nigeria.
The Act confers on AMCON the power to, among others, take possession, manage, foreclose or sell, transfer, assign or otherwise deal with the asset or property used as security for Eligible Bank Assets (EBAs), and related matters.
As a ‘bad bank,’ AMCON has current huge outstanding debt of over ₦4.4trillion owed by a few individuals that destroyed a good number of financial institutions through huge borrowings with no intention to pay back the loans.
The bad debts cut across many sectors of the economy including oil and gas, manufacturing, airlines, real estate and construction, maritime, power, and insurance and a host of others.
But as AMCON intensifies efforts to recover the huge outstanding debts, the obligors have perfected the act of hiding under all sorts of technical lacunas in the AMCON Act to frustrate recovery, a development that necessitated the tweaking of law.
Earlier, the Managing Director/CEO of AMCON, Ahmed Kuru, reiterated that the Corporation is on a national assignment, which requires the collaboration of all agencies of the government.
Kuru, represented by the Executive Director, Operations, Aminu Ismail, said this high-level collaboration is needed because AMCON’s total current exposure on all Eligible Bank Assets (EBAs) presently stands at ₦4.4 trillion.
Of this total, only 350 outstanding obligors account for 83% of the EBAs with 244 of them in various courts. However, the collateral coverage is only 16% of the total current exposure.