Members of the Senate Committee on Banking, Insurance and other Financial Institutions, on Wednesday, December 13, grilled the management of the Assets Management Company of Nigeria (AMCON) over alleged woeful performance as indicated in its balance sheet recently submitted to the committee panel.
The lawmakers decried a loss of N146 billion recorded incurred by the corporation in its operation in 12 months.
The panel made the observations when the Managing Director of AMCON, Ahmed Kuru appeared before he committee to defend the agency’s 2024 budget.
Apart from the chairman of the committee, Tokunbo Abiru (APC-Lagos East, other lawmakers present at the session include Senator Sani Musa, Senator Jimoh Ibrahim; Senator Adamu Aliero and, Senator Ifeanyi Ubah, among others.
Speaking at the session, most senators on the committee raised concerns over the financial statements of the assets recovery agency, which indicated a huge loss.
In his contribution, Senator Musa noted that most of the digits in AMCON’s balance sheets were in the negative.
The lawmaker further explained that the same debtors had re-acquired some of the companies that AMCON took over due to non-performing loans, lamenting that the purpose of establishing AMCON had not been justified 13 years after its formation.
He said: “I can see from the balance sheet, the summary of profit and loss. Most of the digits are at loss. Are we going to continue this way? If we are to do this after 13 years, then there is reason to call for the amendment of the Act that established AMCON or the outright scrapping of the corporation. Our bad loans have been given for free and we have not seen any action from the regulator.”
On his part, Senator Ibrahim observed that from the balance sheets submitted to the committee for scrutiny, it was obvious that the corporation was performing below expectation.
He said that from the end of the year balance sheets the company recorded a loss of N146 billion, which according to him, called for concern.
Ibrahim said: “I am astonished that your balance sheet is not looking good at all. It calls for serious concerns. For instance, your total comprehensive profit and loss at the end of the year came to a loss of N146 billion. The net operating profit and loss is N126 billion. This further calls for concerns about AMCON’s financial status.
“This is a big loss. You are created to collect loans from debtors. Besides, the special powers of AMCON conflicts with the provisions of the Constitution of the Federal Republic of Nigeria, 1999, which is void and of no effect. You cannot operate in a draconian way with such special powers.”
Ibrahim, whose firm was once taken over by AMCON, further questioned the management of the corporation why he was buying cash-collateralized loans.
The Managing Director of AMCON, Ahmed Kuru, had in his presentation, said that if the Corporation had not been established, more than 21 banks would have gone under and more than 3,000 jobs would have been lost.
He said that out of the N1.8trillion that was used to purchase the loans, AMCON has recovered 96 per cent of the amount.
Kuru said: “If AMCON was not created more than 21 banks would have gone under and more than 3,000 jobs would have been at risk, N2trillion at that time would have been at risk.
“AMCON was not created to run any business, but a recovery agency. We don’t get into the business of individuals.
“Out of the N1.8trillion that was used to purchase the loan, AMCON has recovered 96 per cent of that because of the interest elements, that is why recovery rate is still poor.
“AMCON’s law does not allow anyone to buy asset from it. It’s against the law, you can’t buy your assets but they can pay your liabilities.”