In the past two weeks or so, the managing director of the Assets Management Corporation of Nigeria (AMCON), Ahmed Kuru has visited the head office of the Economic and Financial Crimes Commission (EFCC) on the account of an allegation related to the sales of seized assets. According to sources, a petitioner has accused Kuru of assets diversion and selling of seized assets to cronies at below par value and the anti-graft agency has laboured to extract some information from the AMCON chief executive to help in its investigation on the allegation.
The corporation’s head of corporate communication, Jude Nwauzor confirmed the visit of his boss to the EFCC office for a chat but decline to give details of Kuru’s encounter with the anti-graft agency.
Nwauzor said his boss only visited the commission office once last week Wednesday. Also, messages and calls to the media official of the EFCC, Wilson Uwajeren to clarify issues surrounding the AMCON chief executive interrogation by the operatives of the commission were not responded to as of the time of this publication.
AMCON came to being in July 2010 after a major financial crisis in the nation’s banking industry in 2009 as a result of rapid loan default and over leveraging by some financial institutions, which led to the bailout of some banks by the Central Bank of Nigeria (CBN) and liquidation of some others. The Lamido Sanusi-led CBN had conceived the AMCON option as a vehicle to assume some of the liabilities of the banking sector to ensure that the industry was not encumbered by huge Non-Performing Loans (NPLs) and get distracted from its primary mandate of financial intermediation.
Therefore, AMCON acquired some liabilities of some banks at a discount and chose to pursue the debtors using model of negotiation and liquidation of assets in debt recovery and resolution. The objective was to ensure that an independent agency, with the backing of the government develop the capacity to recover all outstanding debts owed banks by debtors.
According to the Act that set up AMCON, the corporation was intended to exist for ten years and within that spate of time, the corporation was expected to have been able to recover all outstanding debts put at around N5 trillion and restore sanity in the banking industry. However, more than ten years down the line, the corporation has become a behemoth without much achievement to show for its creation partially due to some legal constraint, habits of many Nigerians to debt repayment and perhaps corruption within the system, which has stalled it from efficiently performing its responsibility.
The case against Kuru still remain in the realm of allegation since the EFCC has not come out openly on its investigations into the alleged sales of seized assets by the AMCON chief executive, it’s, however of note that such allegations has become a common place in the public sector.
For instance, the immediate past Chairman of the anti-graft agency, Ibrahim Magu was subjected to rigorous investigation by the government based on similar allegations of abusing his office in the course of discharging his duty.
He was alleged to have sold some of the recovered assets in the commission possession without rendering account and in some cases, those assets were said to have been sold to cronies at price below the par value.
Also, a former Chairman of the Special Investigation Panel for the Recovery of Public Property, Okoi Obono-Obla was hurriedly chased out of office and has since become a fugitive due to similar allegations of illegally appropriating some of the assets recovered for personal use. He was equally accused of selling some of the assets to cronies, families and friends as below market price. Similar allegations have also been hurled at some person in the office of the country’s Attorney General, Abubakar Malami; that some of his aides are selling recovered assets at below market price, converting the money to personal use and denying government of resources due to it..
We can go on and on cases by cases where public official entrusted with the responsibility of sanitizing the system of corruption have themselves become enmeshed in corruption and self aggrandizement allegations.
It’s important that the EFCC should carefully investigate the AMCON chief and ensure that justice is done to serve as deterrent to others in similar position and save the country of the huge loss to corruption.
The corporation ordinarily should have come clean on the interactions of its chief executive with the EFCC and state their position on what actually transpired in order to clear the mind of Nigerians who have entrusted so much hope on the capacity of AMCON to make a difference.
Looking at the operations of AMCON since its inception, it appears the corporation may have lost focus or got its priority wrong in terms of debt recovery and the impact of its operations on the system.
For instance, the corporation has in the course of carrying out its function caused unintended negative impacts on the economy, which often led to loss of jobs, destruction/deterioration of assets and disruption of business environment. A case in point is one of Nigeria’s biggest cocoa processing firms, Multi-Trex Integrated Foods Plc located off Ibadan-Lagos expressway, which has been shut down for years, with machinery purchased in millions of dollars rotting away while workers of the firm had been rendered jobless.
There are many other companies, which the corporation has shut down in the guise of debt recovery, which has done grievous damage to the economy, deprived the country of possible tax earnings, job loss and shareholders from realizing reward for their investment.
In other clime, debt resolution is handled with the eyes on the implications on the general economy and well being of those who are concerned. Closing down businesses often lead to dislocation of many economic agents, such as the producers of goods, the sellers and buyers as well as direct impact on employment.
A business that was closed down without proper effort to maintain the machinery is in jeopardy of losing those tools of production, which often become obsolete, while the production value chains are also disrupted causing scarcity of goods and leading to inflation in the economy,
A major review of the modus operands of debt recovery and debt resolution process should be carried out to ensure that what seemingly is regarded as solution may not eventually become a major problem for the system that could cost the economy huge losses at the end of the day.
The corporation should explore other methods of debt resolution whereby companies in default should either be concession to new investors so that their operations would not be disrupted while effort is being made to recover the debt owed by such firms.
The government should also review the cost and benefits of the continued existence of the corporation to the economy and be honest enough to justify either to continue to sustain its operations or a major reform is needed to be carried out to ensure compliance with the objectives of its creation.
… Credit: Global Financial Digest
