AMCON DEBT RECOVERY HITS 112%, SAYS CHIKE-OBI – The Asset Management Corporation of Nigeria (AMCON) has recovered 112 per cent of its debt, its Managing Director/Chief Executive Officer, Mr. Mustapha Chike-Obi said Wednesday.
Speaking at a symposium organised by the Bank Directors Association of Nigeria (BDAN) in Lagos, Chike-Obi expressed satisfaction that the corporation has been able to responsibly carry out its objectives.
Chike-obi said: “We have recovered about 112 per cent, we are recovering more than what we expected so far.”
He further explained that the corporation can only buy bonds that the Central Bank of Nigeria designates.
“AMCON does not have the power and authority to buy bonds or debts. In addition, the pricing of the bonds are done by the central bank,” he added.
Commenting on the anticipated sale of Enterprise Bank, the AMCON boss said: “We are going to sell Enterprise by May and we expect to have completed both sales by September.
“We cannot tell who the buyers because it would require regulatory approval- CBN, Securities and Exchange Commission (SEC) and other approvals.”
He also explained: “We do not plan to make this (AMCON) permanent, we plan for 10 years and we hope that after 10 years we remain a very small entity.”
However, the Chief Executive Officer, B. Adedipe Associates, Dr. Biodun Adedipe, expressed divergent opinion on the activities of AMCON.
Adedipe said: “An AMCON continuing in operation in perpetuity is great inefficiency and a waste of taxpayers’ funds, as it will continue to incur high carrying cost from high operational costs as well as from the erosion in the value of assets not disposed and restructured over time.
“The other worry here is the ‘moral hazard’ whereby continuing existence of AMCON would send a wrong signal to the banks to book loans that can always be sold to AMCON if the loans become deficient.”
He added: “The proposal for the AMCON Amendment Act 2013 to make the banks bear the cost of intervention is an aberration that, when properly interpreted, means simply that AMCON bought over NPLs at a discount (banks took the loss on that) and negotiated restructuring terms that possibly included interest (and perhaps principal) forgiveness with the ‘bad debtors’, and will now make the banks contribute to the Sinking Fund that will pay the cost of AMCON’s intervention.”
In summary, he said that the borrowers in question end up getting away with whatever discount AMCON obtained from the banks and the discount they subsequently obtained from AMCON.
Posted by Hope for Nigeria
