The story of Asset Management Corporation of Nigeria (AMCON) just like many other agencies of the Nigerian government, is that of a beautiful concept that was poorly implemented over time, resulting to loss of public confidence and damage to the economy.
There is no doubt that huge non-performing loans pose a big challenge to financial institutions and the Nigerian economy, which led to the creation of AMCON. Unfortunately, instead of sticking to its original mandate, AMCON officials appear to be more interested in taking over the assets of these businesses with the aim of selling them off to themselves and/or their cronies for mere pittance.
In any case, most of these loans that turned bad, came about due to the economic downturn and the policy flip-flops of the government which are beyond the control of these business owners.
Therefore, one begins to wonder whose interests AMCON and their officials are serving. Does it not bother them that this penchant of taking over companies and assets leads to loss of jobs? Of what benefit is it to the Government and the economy if the operations of AMCON is worsening the already bad economic situation with the closure of companies?
At its inception, the understanding that the banking industry and the business community at large had, was that AMCON will help to strengthen the economy.
However, there is a widely held but very wrong impression that every loan that went bad was due to mismanagement of funds, hence the first step is to seize the assets of the company concerned. This is akin to everyone being tarred with the same brush.
Has anyone stopped to ask, why do many loans go bad? Has the economic policies of the past and present governments been supportive of the private sector? Let us take for instance, the recent unification of the exchange rate. How will a borrower, who only 3 months ago took a huge short-term bank loan in Naira to import goods in US Dollars, make substantial profit and repay the said loan within the agreed period? What has the government done to stem the rising tide of smuggling, which suffocates local producers? What about the deteriorating infrastructure? More questions than answers!
Therefore, this lack of human face by the government with respect to the local businesses has created a band of undertakers in AMCON, who witch-hunt borrowers whose business are facing challenges. As soon as these businesses show any semblance of distress, they pounce on their juicy assets, not with the aim of recovering the loans, but with the ulterior motive of lining their pockets with the lucre that comes from selling off these assets.
Stories are replete of how AMCON has taken over businesses that are still going concerns and today such businesses are barely surviving, some are even no longer existing.
To make matters worse is the current trend of trying to use the judiciary to legalize this obnoxious practice. In recent times, the media has been awash with cases of ex-parte injunctions obtained by AMCON against companies, in order to take over their assets. This is despite the fact that most of these companies are still negotiating with AMCON on how these debts are to be paid.
In fact, it is no longer news, that AMCON choses and picks which court judgments to obey and ignore. Therefore, most times they act even when they are restrained by court orders, which is a clear case of contempt of court.
In some cases, the debts in question have been cleared but AMCON chooses to turn a blind eye to the facts because the acquisition of assets, especially those located in highbrow areas, serves the interest of highly placed AMCON officials and their paymasters.
There is no gainsaying the fact that AMCON is a party in most of these court cases, instituted by them or against them. Therefore, it is alarming that the management of AMCON hobnobs with the judges who are handling these cases. One begins to wonder how these judges can maintain their independence in these matters.
A good case in point, is the recent training programme for judges of the Federal High Courts, held in London and bankrolled by AMCON. What was the real essence of this seminar? Does it mean that up till this moment, Your Lordships are not well acquainted with the dynamics of financial cases, hence the need to be properly “schooled” by AMCON and their agents? Even if there is need for this so-called training, should it not have been conducted by another neutral agency? There is more to this than meet the eye.
It goes without saying that the time has come for the government to review the operations of AMCON and determine whether it is still relevant in the scheme of the overall project of the nation’s economic revival and sustenance of businesses. This is against the backdrop of the fact that AMCON, established about 14 years ago, was initially convinced as an ad-hoc arrangement that would round-off its activities within a 10-year period by which time it is believed that the other statutory regulatory organs in the financial/banking industry such as the Nigeria Deposit Insurance Corporation (NDIC) would have been better equipped to properly monitor the industry players and reduce the cases of bad loans.
However, due to the usual Nigerian factor, AMCON has transited from a temporary to a permanent agency. This is good news for those who are benefitting from this cesspit of corruption but bad news for the Nigerian business community as the activities of AMCON poses a danger to general economic prosperity.
*Oscar Japhet, Nigerian in Diaspora, wrote from Southern Carolina, United States of America
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