AMCON created by FG to deal with a special problem

The Federal High Court Awka Division, Justice Nnamdi Dimgba, has said the Federal Government of Nigeria created the Asset Management Corporation of Nigeria (AMCON) and granted the agency some special powers to enable it to recover its troublesome bad debts.

Justice Dimgba who was speaking at the weekend to participants at an interactive organized by Legal Academy for Land Registry Officials, Corporate Affairs Commission personnel, AMCON and other stakeholders of the Federal Government while reacting to the enormous powers of AMCON on Saturday in Abuja took sides with President Muhammadu Buhari, the National Assembly, the Federal Ministry of Finance, AMCON and the Central Bank.

He said they need to do whatever it takes within the ambit of the law to ensure that these 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. This move the legal luminary argued is because AMCON is a ‘Special Animal’ created by the Federal Government of Nigeria to deal with special problems in the country, which started with the global financial meltdown that affected many economies the world over including Nigeria.

Earlier in his submission, Mr Aminu Ismail, AMCON Executive Director of Operations who represented Mr Ahmed Kuru AMCON MD/CEO at the interactive session reminded participants that the AMCON mandate remains a national assignment, which requires the collaboration of all agencies of the government.

He 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 huge number, only 350 outstanding obligors account for 83 per cent of the total EBA balance just as 244 of the top 350 obligors are in various courts. However, the collateral coverage is only 16 per cent of the total current exposure.

As a ‘bad bank,’ AMCON has current huge outstanding debt of over N4.4trillion owed by a few individuals that destroyed a good number of financial institutions through huge borrowings with no intention to pay back the loans. Consequently, the bad loans were sold to AMCON when it was created in 2010.

AMCON upon taking over the bad debts, AMCON recapitalised a good number of the affected financial institutions and stabilised the financial sector. Having completed that AMCON then has the mandate to go after the obligors to recover the debt.