Shareholders under the aegis of the Independent Shareholders Association (ISAN) have again called on the federal government to completely review the operations of the Asset Management Corporation of Nigeria (AMCON).
Speaking at a press briefing in Lagos during the weekend, the Coordinator Emeritus of ISAN, Sir Sunny Nwosu said, “As concerned domestic investors, our patriotism is not in doubt as we demand once again the complete review of AMCON to determine its relevance to the economy or totally abrogate the agency following the declining values of companies taken over by the corporation and the current national economic challenges.”
He disclosed that AMCON earned about N327.6 billion from 0.5 per cent charges on banks’ total assets on and off-balance sheet items imposed on nine banks between 2020 and 2021.
He also disclosed, “As part of the quick intervention in the banking sector bad debts, by CBN through AMCON, the debt recovery agency equally received N125.9 billion from 12 commercial banks listed on the Nigerian Exchange as part of the Sector’s resolution funds in the first quarter of 2022. In the same period, AMCON bank charges increased by 29.5 per cent from N97.18 billion paid in the corresponding period of 2021 to N125.9 billion in the first quarter of 2022.”
He, however, said after 12 years of the agency’s operations, Nigerian shareholders have come to the conclusion that the funding of AMCON with levies from commercial banks’ cannot be continued because of its negative impact on returns on investment and the incapacitation of commercial banks to adequately intervene in the nation’s real sector.
“The fundamental of our argument is premised on the fact that AMCON was not set up by the banks, but by the Federal Government, which must take responsibility for its operations,” he explained.
According to him, AMCON is currently reported to have about N1.7 trillion worth of assets under litigation across the country, disclosing further that as at August 2022, the total recoveries so far by the corporation are pegged at about N1.4 trillion.
He noted that the poor recovery of the agency has prompted most stakeholders rush to ascertain the current value of the forfeited asset stocks, stating that their inquisition followed noticeable failed efforts made by organization to dispose the assets.
“With the mandate to acquire toxic loans from troubled banks at a discount, AMCON was expected to dispose the loans within the stipulated time frame and use the proceeds to leverage the national economy.
“Obviously AMCON’s failure to live up to expectation has generated serious stakeholders’ queries and this press conference is one of them questioning the justification for the establishment of AMCON.
“We also want to submit that the corporation’s delay in turning around the ‘toxic’ loans remains very worrisome, especially now that the federal government is facing dwindling revenue and challenges in executing critical capital projects,” Nwosu said.
He noted that shareholders are concerned because AMCON is gradually gravitating toward a failed government agency following the high level of debts, which currently stood at more than N16 trillion and the corporation’s foray into the purchase of new non-performing loans from banks outside its original mandate.
“The government debt recovery agency accumulation of excess debts has also became a source of concern to the National Assembly (NASS) as the lawmakers seek fresh approach out of the increasing banks non-performing loans.
“We are also bothered that the debts owed by few individuals who exploited the loopholes in the current AMCON Act to evaded payment. The same high net worth individuals we gathered equally lobbied and championed the recent amendment of the act establishing AMCON,” according to him.
He expressed that shareholders urged the federal government and Central Bank of Nigeria (CBN) to rise up to the national systemic banking industry challenges through sustainable financial sector bailout.
“Shareholders serious believe that the federal government floating of AMCON is a distraction that has prolonged the banking industry challenges and must be eliminated with huge funds intervention like in most developing and developed climes. Our position like we said before is that AMCON has overstayed its function and urged the CBN to suspend levying commercial banks. We are averse to AMCON successful lobbying of the federal government and lawmakers to extend its operations but our opinion remains that if CBN wants to sustain AMCON, it must not be though levies from the banking industry,”
“We as shareholders are worried that AMCON is reporting losses despite collecting huge levies from banks and having challenges in selling recovered assets from debtors. They poor performance of the corporation serious to our mind queries the recent National Assembly elongation of AMCON’s life span,” he said.
