Senators fume, demand scrapping of AMCON over N5trn liabilities
The senators said AMCON was not proactive in recovering liabilities totalling N5 trillion.
ByAbdulqudus Ogundapo December 13, 2023 Reading Time: 2 mins read
Members of the Senate Committee on Banking, Insurance and Other Financial Institutions, on Wednesday, demanded the dissolution of the Asset Management Corporation of Nigeria (AMCON) over the failure to recover liabilities totalling N5 trillion.
The lawmakers made the demand when the Managing Director of AMCON, Ahmed Kuru, appeared before it to defend the agency’s budgetary allocation for the 2024 fiscal year.
During the budget defence, Mr Kuru told the federal lawmakers that AMCON recovered about N648 billion out of the agency’s total liabilities of N5 trillion as of 20 September.
Some members of the committee thereafter expressed concern over the financial statements of AMCON since the beginning of the year.
They called for the dissolution of the asset agency on the grounds that its management was not proactive in recovering liabilities.
Those who called for the dissolution of AMCON are Sani Musa (APC Niger East), Jimoh Ibrahim (APC, Ondo South), Adamu Aliero (PDP, Kebbi Central) and Ifeanyi Ubah (APC, Anambra South).
Anger, calls for scrapping of AMCON
Mr Musa, who is also chairman of the senate committee on finance, expressed dissatisfaction with the agency’s performance.
“Most of the loans were owed by individual companies which were never sanctioned and at the end of the day, the same company would go back to buy back their assets that AMCON had hitherto taken over. Are we going to continue like this?
“It is not only about defending the budget, it is about seeing the effect of the appropriation. We need to know whether it is working. Or are we just creating a job for those we can’t protect?
“Will it not be better to scrap AMCON since it seems to have lost its statutory mandate?” the senator asked.
Mr Ibrahim, on his part, lamented the huge financial loss of the assets recovery agency.
“Your total comprehensive profit and loss, and it came into a loss of N145 billion. This calls for concern.
“Your net operating profit and loss is N126 billion. What is responsible for all these big losses? You are created to collect bank loans from them.
“Even if you are now regulators to the debtors, why are you incurring losses? Your balance sheet is not looking so good. Again, why are you buying cash-collateralised loans?” he asked.
At some point, the Chairman of the committee, Tokunbo Abiru, attempted to calm his colleagues down and stop them from scrutinising the managing director of AMCON.
However, when the argument was becoming too hot, the chairman directed that the panel should go into a closed-door session.
After about 30 minutes of the closed-door session, Mr Abiru addressed journalists and announced that members of the committee had agreed to support the existence of AMCON.
“The committee has agreed that there is the need for a strong financial system stability hence agencies like AMCON are still desirable.
“We also believe that the role of AMCON is further underscored by the fact that it was set up using a model that would help us to tidy up the challenges that we had in the financial system in the past.
“The only challenge that we had today is that we need to have a definite time that all the obligations that are hanging on the throat of AMCON must be redeemed.
“The conclusion is that we will continue to work with AMCON and other agencies to fashion out a model that would make AMCON openly wound down its obligation in the possible shortest time.
“There is no society that does not have AMCON in one form or the other. The only way we can resolve financial stability is through the creation of an entity like this and we need to ensure its success” Mr Abiru explained.