AMCON was established through the Asset Management Corporation of Nigeria Act, 2010 (AMCON Act), with a mandate to efficiently resolve all problems associated with non-performing loans in Nigerian banks, financial institutions, and corporations.
It was set up to achieve three-fold functions,
- Reducing the level of Non-Performing Loans on the books of eligible banks
- Assisting in the recapitalization of banks deemed to be in grave danger.
- Managing all acquired assets in a manner consistent both with minimum resolution cost.
There has been calls for the winding down of the operations of AMCON based on the fact that the CBN has succeeded largely in restoring stability in the Nigerian financial system which was hit by crisis in 2009 as a result of huge non performing loans which threatened the existence of many banks and saw the CBN intervening in five of the banks with N620 billion as bailout package but many are of the view that the agency is still relevant.
These are the companies acquired by AMCON in recent times.
Wokson International Ltd
AMCON announced in May 2017 that it has moved in and taken over all the assets of Wokson International Limited and that of its principal, Chief Oki as ordered by the Court through Mr. Robert Ohuoba, the Receiver who also received protective orders from the court. The assets, which are now under AMCON include asphalt plants, hotels and several houses belonging to Workson International and Dr. William Oki. AMCON, took over all the assets of Wokson International Ltd in Asaba and Warri, Delta state, due to a ₦ 5 billion debt.
Gateway Portland Cement
AMCON announced in July 2017 that it has taken possession of Gateway Portland Cement Ltd in Ogun State, over the debt of nearly ₦3 billion. The possession followed an injunction against Gateway Portland Cement granted by the Federal High Court Abeokuta Division, Ogun State.
Kanu Nwakwo’s Hardley Suites
The Hardley Apartments, on Waziri Ibrahim Crescent, Victoria Island (Lagos) owned by former international soccer star and Africa’s Legend, Nwankwo Kanu, along with his estranged ex-banker friend, Ayoola Gam-Ikon was taken over by AMCON over alleged ₦ 924 million debt in January 2016. The good news is that the Senate has promised to look into the take-over with a view to an amicable resolution.
Aero Contractors
The Central Bank of Nigeria (CBN) stopped all credits to the airline because of its $200 million debt. In February 2016, the airline confirmed that AMCON had bought its debts which made it the highest shareholder with 50 percent equities of Aero Contractor. AMCON also appointed a chairman for the airline to oversee the running of the troubled airline. The airline is the oldest aviation company in the country. The services of a reputable accounting firm to undertake a forensic audit of the airline’s accounts.
Daily Times Newspaper
The foremost media outfit also fell to the hammer. According to a statement from AMCON, the take-over became necessary having exhausted all avenues of peaceful resolve the huge outstanding debt owed AMCON by the Daily Times Plc. The Federal High Court on February 1, 2018, presided over by Honourable Justice I. N Buba ordered AMCON to take over the Daily Times.
The Federal Government of Nigeria once held 96.05 percent share in Daily Times through NICON Insurance Plc and during the tenure of former President Olusegun Obasanjo in 2004, bids from the general public were sought as it prepared to divest its stake in the oldest newspaper conglomerate. Consequently, Folio Communications Ltd, owned by Fidelis Anosike and his brother Noel Anosike tendered a bid for the said shares and was confirmed by the Bureau for Public Enterprises (BPE), as the most preferred bidder for the shares.
The BPE sold to Folio at the cost of ₦1.25 billion, however, since the 2004 privatization exercise, Folio Communications had been trapped in court cases following a loan of N750 million from Hallmark Bank Plc, which was secured to enable it to pay for the newspaper company.
Arik Air
The nation’s largest local carrier also fell under the hammer of Asset Management Company of Nigeria, AMCON announced the takeover of the management in February 2017 and appointed Capt. Roy Ukpebo Ilegbodu as the Managing Director. The airline is indebted to AMCON to the tune of ₦135 billion.
The airline has been in turmoil which was largely caused by bad corporate governance, erratic operational challenges, inability to pay staff salaries and heavy debt burden among other issues, all these which led to the call for authorities in the country to intervene before the airline goes under like many before it.
Minister of State for Aviation, Senator Hadi Siriki while explaining the rationale behind the take-over said
“We believe that this appointment is timely and will stabilize the operations of the airline. It will enhance the long-term economic value of Arik Air and revitalize the airline’s ailing operations as well as sustain safety standards, in view of Arik Air’s pivotal role in the Nigerian aviation sector.”
Amcon should have never be established by law. Nigeria needs a devoted and dedicated bankruptcy court. A bankruptcy law that’s protects coys should be enacted by law.
Amcon has never made a profit in any coy it took over. It made no sense using public money to buy distress coy cause it wanted to protect financial institutions loans on its balance sheet.
The establishment of Amcon was wrong from the get go.
Spot On! But don’t you think some directors will hide under this law to mismanage loans granted to them by financial institutions. It is always good to have a carrot and stick approach in an environment like ours.
fikayo are you not a correspodant for nairametric ?,who said amcon should not be set-up and why or what for ?we use to have a revenue court,which changed into federal court controlled by central govt.you must get used to this idea of amcon,if you do not like it.,which was set-up by the central bank and the national assembly,the cbn reflects the executive arms of the govt,the national assembly reflect the collective will of the Nigerian people.
This dumbstick2 is not a Nigerian,bankruptcy should have been covered by Nigerian law.This amcon was set-up for several reasons,one for macroeconomy reason,i.e production,losses of employment.it was set for seeing the bigger picture of everything,in some of those companies,the directors did guaranteed,some of those debt in their personal capacity.meaning amcon will pursue them,to recover this debt,they will pawn or auction their cars,their property,their clothesi.e. if amcon becomes proactive. there is a conventional agreement between debt and debt collectors..once a court judgement is received.the debt collector received about 10 % of recovered debt.after all selling
is not dumbstick2 moron its DUMSON23. Bankruptcy business law as constituted in advance economy is best suited than Amcon. bankrupty protects the coy in debts to financial institutions by giving the coy a protection while its pays off its debt on pennies on the dollar in Nigeria case kobo on the naria.
Amcon a public institution set up by law as no business buying up debts. first you have to understand public institution have no business being in business.
Business takes risks, financial institutions makes money by lending money to coy. in the course of taking a loan the coy defaults. Bankrupty court sets in protects the coy and makes plans where instead of recoving the full amount owed to financial coys the court in collaboration with the default coy and bank work out a payment plan but the coy is not repaying full amount owed but any where from 20kobo to 70 kobo on the naria owed. why? because both parties where both taking a risk. the coy and the banks. you cant punish one and make the other whole.
Dumbstick 23,you must thank your star,you’e not close to me,i will slap out your pink face.what is the difference between a public instution and a private coy in your mind.Govt in their wisdom thought,this is the best solution.in your country,a similar excise was donein your country to.warehousees toxic loan,and they started to print money- another name for qualitative easing,lower bank interest and buys companies bond,which fuels American stock market,which triple the stock market
America do not had a centralbank fro many years, to regulate various banks,and this is why the federal reserve board was set-up,as early last century,there was failing of many America banks,and this is what they are doing nowi.e,they have bought companies bond to about 5 trillion dollar up date since 2008.
The Nigeria initiative was different,as they felt banks can do more,and they merged some weak bank,they did not lower public bank interest,or print money.THE MAJOR PROBLEM WAS THAT THE ECONOMY WAS WEAK DUE TO SAP.WHEN THIS RECESSION HAPENED IT REACHED NIGERIA,ONLY CANADA AND AUSTRALIA ESCAPED THIS GLOBAL..could Nigeria avoided this recession,i doubt it,as the recipe for pending disaster,that would have happen.did happened
Meaning,this AMCON was one off,as the economy have not reached 25 %,of what it should have been.banks are contiduing doing their business of lending and recovering it’s debt,which of bank whoa are are private,purely commercial and business affair,they go to court for judgementNATURE ABHORES VACUM i.e previous govt created this crisis in 2008.so govt solved the problem it created.SAP WAS DONE UNDER MILITAR DICTATOR,THERE WAS NO CONSULTATION.WITH THE ADVERT OF DEMOCRACY SAP WOULD NOT HAVE HAPPENED.WHAT GOES UP COMES DOWN.THAT IS WHY YOU’RE STUPID
WOW!!!you must have a small expletive. so you think you can slap me. ok am a Nigerian come get at me.