The task assigned to the Asset Management Corporation of Nigeria (AMCON) to recover over N5trillion debt may be a tall order except high court judges rally round the bad debt bank.
According to Justice Adamu Abdu Kafarati, the Chief Judge of Federal High Court, Abuja Division, who stated this in his remarks at the National Judicial Institute (NJI), Abuja, when he addressed federal high court judges at an interactive session between NJI, AMCON and federal high court judges, it has become imperative for judges in the country to support the recovery efforts of the Corporation since it was established as a central element of government’s response to financial crisis in the country.
Describing AMCON’s assignment to recover over N5trillion for the country as a national assignment that must be supported by all stakeholders, especially the judiciary, the Chief Judge also enumerated the crises that would have engulfed the economy if government did not establish AMCON at the time they did.
His words: “My Lords, banks are drivers of the economy as they supply its oxygen. That is why during the 2008/2009 financial crisis in Nigeria (partly triggered by global financial crisis, and partly by domestic activities), government intervened to support the banks by bailing them out in order to allow the financial system continue functioning.
In the absence of government intervention in the banks through the vehicle which AMCON provided, a number of banks in the country would have failed, thereby inhibiting banks from playing their crucial roles in the economy like payment, services to households and companies, extension of credits, savings accounts and financial insurance among others.
“The interruption to the critical service that banks provide, and the likely loss of confidence in the system that would have followed, would have led to widespread disruption and ultimate collapse of the financial system in Nigeria. AMCON was thus created in 2010 as the most important step towards resolving non-performing loans in the banks.
This was effected through the injection of capital into the ailing banks in consideration for equity. Recognising the grave systemic risk posed by high level of bad debts otherwise known as non-performing loans, AMCON was set up to manage the assets transferred to it with a view to maximizing their value through eventual sale or orderly liquidation.”
He said the judiciary must therefore collaborate with AMCON to recover every outstanding debt because with the purchase of the NPLs, AMCON, he argued, is expected to maximize the value of asset recoveries and minimize costs to taxpayers.
Addressing the judges earlier, AMCON Managing Director/Chief Executive Officer, Mr. Ahmed Kuru, said:, “My Lords, it is clear to us now that we (AMCON) cannot go very far without the support of the courts because AMCON obligors deliberately raise technicalities in courts to elongate and delay their cases with AMCON.
“It has become clear to us that in order to attain the target as we approach sunset, we must redouble our efforts in the areas of enforcement. The AMCON Act anticipated a situation where we may need to enforce if negotiations fail. Negotiation has failed us, given our sunset date. It is also clear to us that we cannot go very far without the strong support of the judiciary.
Out of the 191,766 cases pending at the federal high court, more than 3,000 are related to AMCON alone.”