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Senate scores AMCON low on debt recovery

By on January 25, 2014

Members of the Senate on Thursday scored the Asset Management Corporation of Nigeria low, saying the agency had failed to live up to its objective of recovering toxic debts owned by some commercial banks.

The senators also condemned the  alleged ineffective use of the N5.6tn voted into the agency by the Central Bank of Nigeria.

Members of the  Senate, however, passed for a second reading, a bill seeking to amend the Asset Management Company of Nigeria Act 2010.

The bill, among others, seeks to establish a corporate entity with a well constituted Board of Trustees drawn from the CBN, eligible financial institutions, National Deposit Insurance Corporation  and Ministry of Finance.

The body is expected to make regulations for the supervision and management of AMCON fund.

The Chairman, Senate Committee on Banking, Mr. Bassey Otu, who sponsored the bill said it also sought to prohibit any board member or an employee of AMCON from being directly or indirectly involved in the purchase of assets acquired by the corporation.

He also said the amendment bill sought to empower AMCON to acquire assets that are already subject of litigation if there is no valid court order restraining it from doing so.

The senators in their various contributions noted with concern that since AMCON was set up, it had failed to live up to its objective of recovering toxic debts owned by some commercial banks.

The Senate therefore asked its committee on banking to find out the exact amount put into AMCON by the CBN, and also find out how it had made effective use of it as well as how much it had recovered.

Senator Ita Enang said the N5.6tn voted to AMCON exceeded Nigeria’s yearly budget and queried why the company, since it commenced operations, had failed to recover up to 15 per cent of the entire money.

As a result,  he advised the committee to examine the functions and operations of AMCON, saying it is disheartening that the organisation appeared to be failing because the amount committed to it by the CBN was not free money but rather a loan meant to be paid back to the federation account.

 

 

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