A legal consultant and Senior Partner, Olaniwun Ajayi-LP, Mr. Muyiwa Balogun, has challenged the Asset Management Corporation of Nigeria (AMCON) and Judges of the Federal High Court of Nigeria (FHC) to leverage on the 2019 Amended AMCON Act and declare debtors who are holding public office bankrupt.
The new 2019 Amended AMCON Act, which was signed into law by President Muhammadu Buhari earlier in the year provided AMCON with sweeping powers, which is intended to help AMCON recover a huge debt of over N5.4trillion owed the corporation by obligors as a result of AMCON intervention in the banking sector. AMCON was created in 2010 as a result of the global economic crises of 2008/2009, which nearly cripples the financial sector of Nigeria.
Without AMCON’s intervention at the time, depositors would have lost N3.7trillion and over 15,000 jobs would have also been lost. Recall that AMCON had purchased approximately 12, 743 loans from the banks through debt instruments worth N3.9trillion with the simple understanding of recovery either through voluntary payment or disposal of assets of the obligors. The government at the time had thought a strong law could as a matter of fact guarantee that, hence the enactment of the AMCON Act in 2010.
But now that recovery is proving herculean to AMCON and have become a source of pain to the Federal Government, Balogun, who reviewed the new AMCON Act 2019 at a one day seminar for Judges of the FHC in Abuja at the weekend argued that the only alternative to the recovery challenge was for the judges of the FHC to take the matter as a national assignment and explore all the powers of the new amendment.
In attendance at the seminar were the Acting Chief Judge of the Federal High Court, Justice John Terhemba Tsoho, officials of the National Judicial Institute (NJI), the management of AMCON and officials of Legal Academy. Balogun said the Judges of the FHC, which incidentally is AMCON’s court of first instance should as a matter of fact support the corporation to explore the bankruptcy proceedings as provided by the amendment, which he said will at least make it possible for AMCON to rubbish its debtors that are holding public office as persons of no integrity and so cannot hold such office.
According to him, “Once you are declared bankrupt, you cannot hold public office. Today, we have AMCON debtors making laws for the Federal Republic of Nigeria. AMCON with your support needs to go to court and declare such individuals bankrupt. Given the sunset period of AMCON and the fact that the debt we are talking about is the commonwealth of Nigeria, it would not be out of place to take the full advantage of the bankruptcy power among other special powers in the new amendment.”
The concerned lawyer who stated that the bankruptcy proceedings have been explored in other climes to address similar matters argued that there was no reason why it should not work in Nigeria. Again, he said, “As a way of being proactive with the new amendment of the AMCON Act, let us test the bankruptcy proceedings because it will be effective. In other jurisdictions, this has proved to be a very potent tool and why not in Nigeria,” he wondered.
Balogun further painted a gloomy picture of what could further befall the already challenged Nigerian economy, if the debts were not recovered in good time before the sunset period. He said if the Federal High Court Judges and indeed the judiciary do not support AMCON, the debt profile of the corporation can easily rise to a whopping N6.6trillion by 2024 since AMCON still owed the Central Bank of Nigeria (CBN) N4.5trillion just as it is still battling with N1.7trillion of Assets Under Litigation (AUL).
