By Babajide Kimolafe, Emman Ovuakporie & Johnbosco Agbakwuru
ABUJA — THE Asset Management Corporation of Nigeria, AMCON, yesterday, admitted before an investigative panel of the House of Representatives that its debt profile had risen to N6.6 trillion courtesy of accumulated interest payment of N2.1 trillion.
This was disclosed by the Director of Banking Operations, Central Bank of Nigeria (CBN), Mrs Tokunbo Martins, at the House of Representatives public hearing on the sale of banks by AMCON.
The House ad-hoc committee, headed by Albert Abiodun Adeogun, investigating the sale of banks by AMCON, had raised eyebrows at the rise in liabilities, particularly as AMCON owed the CBN N4.5 trillion.
The committee stated that it heard that the CBN was closely monitoring and supervising AMCON to ensure that its liabilities were cleared by the time the corporation was expected to be wound down in 2024.
Chairman of the committee, Adeogun, queried the amount of liabilities, saying: “About two months ago, when we met, you said the liabilities of AMCON stood at N4.5 trillion; today you say it’s N6.6 trillion. What are the components of this liability? Who are your creditors?”
Director of Banking Operations, CBN, Tokunbo Martins, however, explained to the committee that while the debt to the CBN stood at N4.5 trillion, the N6.6 trillion included calculated interest which would have accrued to the debt by 2024.
“AMCON looks at its cash flow periodically… and the banks generate N250 billion annually to AMCON, they have assets that can pay off their liabilities and by 2024, when AMCON is expected to be wound down, the liabilities would have been extinguished,” she said.
She added that due diligence and due process were followed in the sale of Mainstreet and Enterprise Banks.
She explained that the buyers, Skye Bank and Heritage Banks, were not permitted to use depositors funds, “rather, shareholders funds or external funds that would not be called in, in a short while…the fact that we have not withdrawn their licences is a testament that the buyers are fit and proper.”
Takeover of Aero Contractors
The committee also queried why AMCON deemed it fit to takeover Aero Contractors for its significant debts, and did not do same to Arik Air.
The Managing Director of AMCON, Mr. Ahmed Kuru, explained that Aero showed weak corporate governance, because from a fleet of 15 planes at the start of 2015 to three planes by the end of the second quarter.
“If we did not intervene, there would be no airline called Aero by 2016. AMCON owns 60 per cent equity in Aero in addition to a debt of N12 billion. So, we also needed to save our money. Arik is a good airline, and they have not shown any weakness in what they are doing,” he said.
The AMCON boss, however, added that in the next two weeks, AMCON would release its resolution on Arik Air.
Reps to probe sale of govt companies
In another development, the House of Representatives, yesterday, mandated its Committee on Privatisation and Commercialisation to probe all failed concessions and the terms of outright sales of government own companies.
It also mandated the committee to determine why some of the agreements failed and proffer solutions on how to avoid further failures and enhance the productivity and profitability of the affected enterprises.
The resolution followed a motion sponsored by the Rep Gabriel Kolawole (Ondo APC), who noted that non conformity to the terms of some of the agreements had caused enormous financial losses to the country, due to non remittances of appropriate taxes and other financial commitments.
Kolawole noted that there had been uproar by individuals, staff and unions of privatised/partially privatised and conceded government-owned enterprises due to concerns on the non-conformity to the terms of sales and/or agreements by the concessionaires of the enterprises.
The committee is expected to report back to the House in eight weeks..