Payment for the over N5 trillion debt, owed the Asset Management Corporation of Nigeria (AMCON), will be transferred to taxpayers should the corporation fail to recover the funds before its liquidation, AMCON’s Managing Director/Chief Executive Officer Ahmed Kuru, has disclosed.
Going by the Act establishing it, AMCON is expected to be wound down by 2021/2022 after 10 years of its operation.
The AMCON boss spoke in Abuja during a seminar for Corporation’s Receivers/Receiver Managers in General Enforcement held at the weekend.
Kuru, who was represented at the event by Group Head, Resolution Strategy, Aliyu Kalgo, explained that if at sunset, AMCON was unable to recover its outstanding debt of over N5 trillion, the debt burden would automatically become the debt of the Federal Government for which taxpayers’ monies will be used to settle in the long run.
The AMCON boss said the implication of such failure would be that Nigerians will be made to pay for the recklessness of only a few individuals who have continued to take advantage of the loopholes in the laws to escape their moral and legal obligations to repay their debts.
When contacted for clarifications, AMCON Head, Corporate Communications, Jude Nwauzor, told The Nation that the liquidated banks and funds borrowed by the debtors belong to Nigerians, especially the shareholders whose funds were eroded.
He said: “What we are saying is that if we are not able to recover the funds, we will pass it to the Central Bank of Nigeria (CBN) and the apex bank will tax Nigerians and recover the money.
“The CBN could just increase the Value Added Tax (VAT) to maybe 10.5 per cent and Nigerians will pay for it. Government will never bear that cost, never, because the funds were eaten by individuals, who are Nigerians. So, how will government alone bear the cost?
“Let’s say that at the time that AMCON is winding down, and N3.5 trillion is left unpaid, government cannot absorb the funds, because people that collected that money are still alive and they are doing business in other names.”
The AMOCN spokesman said the corporation was taking certain measures, including collaborating with the judiciary, receivers, and the setting up of interagency to recover the funds.
He said: “If you did contract and you owe AMCON, they can deduct your debt and remit the funds to the CBN. We are saying that incase all these measures fail, Nigerians should not expect the government to bear the costs alone. It is not going to happen. Somehow, it will come back to the people either by inflation, taxes, or hike in electricity bills among others.
“The fact is that if the funds are recovered, so many of the infrastructure deficit will be fixed, and Nigerians will be better for it. If the fund is recovered, the people will benefit, and if it is not recovered, the people will suffer.”
Kuru therefore called on all AMCON partners, especially in the receivership business, not to allow a few individuals to escape with the commonwealth of all Nigerians.
He also cautioned that whatever step AMCON receivers intend to take in the process must be in strict compliance and within the confines of the law.
Kuru, who underscored the key role of AMCON receivers in the debt recovery drive of the government agency, said: “We reiterate, our Receivers are key to the success of AMCON. In order to streamline the functions of our Receivers and make them more effective and accountable, we have developed a new Receivership Framework, which will henceforth govern our relationship in terms of management of the assets and accountability.
“We have had course to disengage some of our receiver managers due to non-performance. We did that because assets are being abandoned without cause or plan to come out of the debt. And at times receiver managers are confused about their responsibilities.”
Chief Executive Officer of Alheri Legal and Allied Services Consulting, Alheri B. Nyako, said that AMCON must activate winding up and bankruptcy proceeding in its debt recovery drive.
He argued that Section 52 of the AMCON Act has already provided for winding up of a debtor’s company upon a demand notice for a liquidated sum owed and failure to pay in full within 30 days, thus, making the inability to pay a debt a ground for winding up under the AMCON Act, which is similar to Section 408 (d) of CAMA.
Senior Partner, Lexavier Partners, Francis Chuka Agbu, who was also represented by Mohammad Sani Umar, described receivership as the most effective debt recovery tool within the current insolvency/debt recovery regime.
He challenged AMCON to leverage it to the maximum to help Nigeria especially now that the federal government needs a lot of money to bridge Nigeria’s financial challenged that have been heightened by the outbreak of the dreaded Coronavirus (COVID-19) pandemic.
Narrowing down to how AMCON can apply the powers of receivership, the senior advocate of Nigeria added: “With respect to AMCON receivership, the AMCON Act has further extended the powers/rights of AMCON-appointed Receivers beyond the scope of CAMA and the general principles on receivership.
“Firstly, pursuant to Section 48(3) of the AMCON Act, the receiver’s powers to assume control over the assets of the company are not limited to the assets, which have been charged under the Eligible Bank Asset (EBA), but also included un-pledged/uncharged assets.
“This extraordinary provision bestows a far-reaching advantage on AMCON in the realisation of outstanding EBAs by enabling AMCON to sustain maximum pressure on the debtor company (including its officers and shareholders) and increasing the pool of assets from which AMCON may realise the indebted sum.”
