Reps advocate judicial taskforce to aid AMCON debt recovery

The House of Representatives Committee on Banking and Other Ancillary Institutions has called for the creation of a judicial task force specifically dedicated to the trial of cases involving the Asset Management Corporation of Nigeria.

This move is intended to expedite the resolution of AMCON cases, many of which involve significant financial recoveries for the government.

The taskforce aims to ensure that 350 debtors, representing over 80 per cent of AMCON’s total loan accounts, fulfil their financial obligations and contribute to the country’s economic recovery.

The Committee Chairman, Eze Nwachukwu stated this on Sunday, during an interview at the ongoing 2024 Retreat of the House of Representatives Committee on Banking and Other Ancillary Institutions with AMCON in Enugu.

He expressed disappointment that 350 Nigerian obligors are withholding collective resources and constraining the nation’s economy.

Nwachukwu emphasised the need for urgent action, stating, “We can’t fold our hands and watch them walk away with our collective resources. We have the list of these obligors and will come up with a resolution to address the challenges AMCON faces, including the establishment of a Judicial Taskforce to speed up the recovery of debts.”

He questioned why political cases receive prioritised attention while economic challenges are left unaddressed, saying, “If political cases have lifetime attention, why not prioritize our nation’s economic challenges?”

Nwachukwu vowed to take action, stating, “We can’t continue to sit back and watch these obligors walk away while the country suffers economic hardship.”

He explained that AMCON was established at a time when the nation faced significant economic challenges.

He maintained that the Corporation’s mandate has been clear—to stabilise and revitalise Nigeria’s financial system by resolving non-performing loans and recovering value from distressed assets.

He said, “Over the years, AMCON has made commendable strides in fulfilling this mandate, contributing to the resilience of our banking sector and by extension, the broader economy.

“However, as we look to the future, we recognise that the economic landscape is evolving rapidly. Global and domestic challenges require us to reassess our strategies and adapt to new realities. This retreat presents an opportune moment to reflect on AMCON’s journey so far, to identify areas where we can enhance its capacity, and to align our efforts towards ensuring that the Corporation continues to be a key player in our nation’s economic stability.”

He stated that the theme of the retreat, “Revitalizing Asset Management for Economic Stability: Exploring Policy Changes and Legislative Support for AMCON,” is not only timely but also critically important.

“The task of managing distressed assets is complex, requiring robust policies, innovative approaches, and unwavering legislative backing.

“Revitalisation, in this context, means more than just improving existing processes; it involves a rethinking of the entire framework within which AMCON operates. It calls for strategic adjustments that will enable AMCON to be more proactive, agile, and effective in its interventions.

“Policy is the bedrock upon which effective asset management is built. We must examine our current policies with a critical eye, identifying gaps that hinder AMCON’s operations and proposing reforms that will enhance its effectiveness. Whether it’s in the areas of asset recovery, debt resolution, or stakeholder collaboration, our policies must be forward-thinking and adaptable to the changing economic environment.

“We must also consider the broader economic implications of these policies, ensuring that they contribute to sustainable growth and development,” he stated.

In his address, AMCON’s Managing Director and CEO, Mr Gbenga Alade, revealed that the Corporation is currently dealing with 1,865 court cases across various levels of the judiciary, from the Federal High Court to the Supreme Court, in its efforts to recover loans purchased from bank debtors.

Notably, out of the 12,743 loans acquired, only 350 debtors account for over 80 per cent of the total purchased accounts, with 246 of them currently embroiled in legal battles with AMCON.

This has presented a significant challenge to the Corporation’s recovery efforts, Alade said, and expressed frustration that debtors often exploit legal loopholes to prolong court cases.

Despite these challenges, AMCON boss represented Mr Lucky Adaghe at the event, said that the Corporation has contributed 34 per cent to the funding plan as of December 2023, with the remaining 66 per cent coming from cash redemptions, bond sinking funds, and contributions from banks and the Central Bank of Nigeria.

He said: “Out of the 12,743 loans purchased, only 350 obligors constitute more than 80 per cent of the total purchased accounts. Out of the 350 obligors, about 246 are in various Courts with us. This has continued to pose a major recovery challenge to the Corporation.

“Obligors hide under legal technicalities to tie AMCON in Courts, exploring the loopholes in the statutes and the legal system,” Alade lamented.

On recoveries so far, Alade noted: “To date, the Corporation has made recoveries in the sum of N1.9tn. Of the total recovery, cash recovery represents 43 per cent, sale of 4 bridged banks 13.3 per cent, sales of proprietary shares 11 per cent, claw back & repurchases 9.5 per cent, asset sales & rentals 9.4 per cent, investment income 7.2 per cent, proprietary assets (unsold) 3.1 per cent proprietary shares (unsold) 3.1 per cent and divestment from portfolio 0.3%.”