AMCON N5trn Debt: Top Jurists Seek Speedy Judicial Rulings
BY VICTOR OSOWOCHI, ABUJA – Good news is coming the way of Asset Management Corporation of Nigeria (AMCON) as top judicial officers have canvassed speedy but fair dispensation of cases against defiant obligors before the courts.
President of the Court of Appeal, Justice Monica Dongban-Mensem, and Administrator of the National Judicial Institute (NJI), Justice Rosaline Bozimo (rtd) believe with the judiciary speeding up hearing in AMCON cases, efforts at recovering huge sums from stubborn debtors will yield the expected results.
However, the two officers maintained that in seeking justice against all debtors, judicial intervention must be within the ambit of the law.
This is as the Managing Director and Chief Executive Officer of AMCON, Mr Ahmed Kuru, lamented the high number of legal cases that the Corporation is currently pursuing against many of its obligors in several courts.
These were highlights of issues that arose at a two-day annual seminar, jointly organised by the NJI and Legal Academy in conjunction with AMCON, for Justices of the Courts of Appeal in Abuja.
In her presentation, Justice Dongban-Mensem urged stakeholders’ support for AMCON, saying that given its work at ensuring the nation’s financial system did not collapse, all sister government agencies should be on board to aid AMCON in recovering its outstanding huge debt from recalcitrant obligors
Noting that some debtors were exploring judicial technicalities to gain more time and delay justice, the Appeal Court President said: “Although Nigerian banks were restructured prior to the financial crisis through consolidation, the restructuring did not shield Nigerian banks from the effects of the crises.”
She said AMCON establishment was government response to stimulate recovery of the banking system through buying non-performing assets of troubled banks.
According to her; “Eight factors were primarily responsible for the crisis in Nigeria. They include macro-economic instability caused by large and sudden capital inflows, major failures in corporate governance in banks, lack of investor and consumer sophistication, inadequate disclosure and transparency about the financial position of banks, critical gaps in regulatory framework and regulations, uneven supervision and enforcement, unstructured governance and management processes at the CBN/and weaknesses in the business environment.”
Urging the judiciary to support AMCON recover its debt, Justice Dongban-Mensem said: “In the wake of a financial crisis, banks found themselves saddled with plethora of defaulting loans. In addition to causing default, the crisis typically led to depreciation in the value of securities created against these defaulting loans thereby leaving banks with an unfortunate inability to recoup their losses.”
For the NJI Administrator, Justice Bozimo, the judiciary’s role in executing AMCON mandate is very important, adding; “This is understandable, considering that the distinguished Bench is indispensable to the realisation of the enormous powers conferred on the corporation by the AMCON Act.
“It is through these interactions that the Judiciary will be sensitised on the complex role AMCON plays at ensuring the sustenance of the financial system stability in Nigeria.”
The jurist noted that the “level of financial stability currently enjoyed in the country is solely attributable to the role played by AMCON in offloading toxic portfolios from the balance sheets of banks thus enabling the banks to perform their intermediating role in the macro-economy.”
Acknowledging the huge challenges and difficulties confronting AMCON in realising its mandate, Justice Bozimo said sensitising and providing required updates for the judiciary, particularly the judges, are part of conscious efforts to assist the Commission overcome its challenges
“AMCON’s intervention in the economy at the time it was set up by the Federal Government ensured the integrity of banks and saved their employees from sudden and untimely disengagement. In other words, with the establishment of AMCON, Nigerian banks were saved from imminent collapse and their employees secured from retrenchment”, she said
Expounding on AMCON’s challenges, Chief Executive, Ahmed Kuru, raised an alarm that national resources are adversely affected due to difficulties in recovering existing debts, currently in the excess of over N5 trillion.
He disclosed that AMCON is currently indebted to the Central Bank of Nigeria (CBN) in the region of N4 trillion, adding the the amount could even rise to about N7 trillion by 2024 at the current inflated rate.
Kuru said the situation calls for urgent assistance from other sister agencies to ensure that some debtors, particularly those interested in crippling the banking sector before AMCON was set up, repay their debts to take the heat off the economy.
He however lauded the Judiciary for sustaining AMCON Task Force in the four divisions of the Court of Appeal to fast-track its pending appeals.
