Federal Government should not do business with AMCON debtors – House of Representatives
House of Representatives yesterday expressed concern over the quality of loans that were acquired by Asset Management Corporation of Nigeria (AMCON) from eligible financial institutions (EFIs).
The House therefore called on the Central Bank of Nigeria (CBN) and the Federal Ministry of Finance, among other regulators, to immediately ensure that all wrongly declared loans by commercial banks were clawed back to enable AMCON cover its funding gap.
The House also said that loans without proper documentation or which were unrecoverable due to packaging or state of the collateral should be reloaded back to the financial institutions, since they were now making profit.
This declaration was made when the House Committee on Banking and Currency led by Jones Chukwudi Onyereri visited AMCON’s head office in Abuja as part of its oversight functions to review the Corporation’s 2016 budget performance.
During his welcome remarks, Ahmed Kuru, CEO of AMCON, while welcoming the Committee in company of its top management staff, informed the Committee that for AMCON to survive and meet its obligations, the root causes of some of the loans that ended with AMCON need to be revisited.
Kuru reiterated the fact that AMCON was dealing with obligors that had the financial capacity to engage AMCON from court to court in their plot to evade repayment and thereby sabotaging the effort of the Federal Government to resuscitate the economy.
He said there was need for all the relevant government agencies, especially the legislature to rally round AMCON because the failure of AMCON would mean that the gains Nigeria recorded in 2010/2011 when AMCON was created would be lost and the economic difficulty, which was avoided then would eventually befall the nation.
At the end of the exercise, Onyereri, who said the Committee was satisfied with the renewed vigour with which the present AMCON management was pursuing its obligors, however said there was need for the government to review some of its processes and be mindful of how it related with AMCON debtors.
According to Onyereri, giving contract to individuals or companies that are heavily indebted to AMCON to say the least defeats the whole essence of creating the special agency in the first place.
On the recent takeover of Arik Air, the Committee said the Federal Government should among other steps also consider an outright sale of the airline and its assets in order to prevent further wastage of public resources, as there were no reliable statistics to show the impact of the services provided by the airline, stating that such a move would influence other smaller and efficient airlines to grow.