Senators on Wednesday expressed strong disaffection over the performance of the management of the Assets Management Company of Nigeria (AMCON) .
The lawmakers were peeved that the Corporation recorded a loss of N146 billion within a period of 12 months.
The financial loss was revealed when the Managing Director of AMCON, Ahmed Kuru, and his management team appeared before the Senate Committee on Banking, Insurance and other Financial Institutions led by Senator Adetokunbo Abiru as Chairman.
Apart from its Chairman, members of the Committee include Senators Sani Musa, Jimoh Ibrahim, Adamu Aliero Ifeanyi Ubah, among others.
The lawmakers established that the AMCON has been run at a loss consistently in the last 13 years and submitted individually that the corporation has outlived its usefulness.
After examining AMCON balance sheet, Senator representing Niger East who incidentally is Chairman, Senate Committee on Finance, Sani Musa, noted that the corporation was being run at a loss. He wondered how the same debtors had acquired some of the companies that AMCON took over due to non-performing loans.
He said: “I can see from the balance sheet, the summary of profit and loss. Most of the digits are at loss. Are we going to continue this way? If we are to do this after 13 years, then there is reason to call for the amendment of the Act that established AMCON or the outright scrapping of the corporation. Our bad loans have been given for free. And we have not seen any action from the regulator.”
Senator Ibrahim spoke in a similar vein, maintained that from the end of the year balance sheets, the company recorded a loss of N146 billion, which according to him, called for concern.
He said: my“I am astonished that your balance sheet is not looking good at all. It calls for serious concerns.
“For instance, your total comprehensive profit and loss at the end of the year came to a loss of N146 billion. The net operating profit and loss is N126 billion. This further calls for concerns about AMCON’s financial status.
What is responsible for all these big losses? You are created to collect bank loans from them.
“Even if you’re 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?”
“This is a big loss. You are created to collect loans from debtors. Why are you not so impressive? Besides, the special powers of AMCON conflicts with the provisions of the Constitution of the Federal Republic of Nigeria, 1999, which is void and of no effect. You cannot operate in a draconian way with such special powers.”
Chairman of the Committee, Senator Abiru however rose in defence of the agency as the Committee dissolved into a closed door session to stave off a move by other lawmakers smarting for showdown with the AMCON management.
Addressing journalists after about 30 minute closed door meeting, Senator Abiru said the corporation would still continue to be relevant to ensure financial stability.
“The committee has agreed that there is the need for a strong financial system stability hence agencies like AMCON is 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 it’s obligation at 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.”
Earlier in his presentation, the MD, AMCON, Alhaji Kuru justified the continued existence of the corporation as he noted that but for the agency, about 21 banks would have gone under and more than 3000 jobs would have been at risk.
“If AMCON was not created , more than 21 banks would have gone under , more than 3000 jobs would have been at risk , 2trillion Naira at that time would have been at risk.
“AMCON was not created to run any business, but as a recovery agency, we don’t get into the business of individuals.
“Out of the N1.8 trillion that was used to purchase the loan , amcon has recovered 96%of that , because of the interest elements, that is why recovery rate is still poor .
“AMCON law does not allow anyone to buy asset from it , it’s against the law, you can’t buy your assets, but they can pay your liabilities. “
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