By Omoh Gabriel, Business Editor

Manoj Kohli, CEO (International) & Joint MD, Bharti airtel (Right), Rajan Swaroop, Chief Executive Officer & Managing Director, Airtel Nigeria (Left) and Deepak Srivastava, Chief Operating Officer & Executive Director, Airtel Nigeria, during the inspection of the company’s Pilot Adopt-A-School programme at Oremeji Primary School 2 in Ajegunle, Lagos State.

Despite AMCON’s disclosure that it had cleared all non performing loans in Nigeria banks and that it was on track to recapitalise banks, rescued in a N620 billion bailout 18 months ago, by the end of the second quarter, the debt overhang in most banks lingers on with billionaire debtors instituting one court action or the other to wriggle out of debt obligations. AMCON Chief Executive, Mustapha Chike-Obi told newsmen that AMCON had issued N600 billion worth of bonds to 22 banks to absorb all remaining non-performing loans in addition to the N1.03 trillion it issued in December.

Chike-Obi said AMCON intended to complete the issuance process by April 6, which will see it list a total of N1.7 trillion bonds backed by government guarantees on the Nigerian stock exchange. It actually did. But in recent weeks the media have been awash with sordid details of the collapse of relationships between Billionaire-debtors and some lending Banks with both parties trading allegations and resorting to under hand tactics, different crude and unconventional tactics over the subject of indebtedness. Notable among these are that of an oil magnate alleged over N 170 billion indebtedness to five Nigerian banks and a growingconstruction and aviation company’s chairman’s N10 billion indebtedness to GT Bank.

After the ill feelings and bad blood the CBN publication of bank debtor list threw up, the matter was about settling down when it again became a subject of interest with the publication of legal notices by one of the creditor-Banks and a counter publication by its debtor as is always the case when business relationships have broken down and become a matter of litigation. The matter at stake and the issue in dispute is billions of naira of depositors’ money which is trapped in the pockets of a group of individuals who perhaps are not willing to repay their debt and are seeking ways of ensuring their indebtedness are written off by the financial institutions to enable them walk-away free and rich – a practice which has sniffed lives out of many once-vibrant Nigerian Banks!

For some banks to recover fully the principal of their non-performing loans, the management had resorted to negotiating with key debtors who applied for forbearance. This happened at the time the Economic and Financial Crimes Commission, EFCC, summoned all debtors of Bank PHB Plc, Equitorial Trust Bank Ltd, Spring Bank Plc to its annex headquarters in Lagos. Some of the debtors were given generous waivers. In one of the first five banks which failed the audit report of the Central Bank, in the first round, a debtor who owed the bank N 11 billion applied for forbearance while the management approved 70 per cent waiver for him. Also, another customer who owes the bank N 1.5 billion was said to have applied for forbearance and got about N 500 million waiver. The debtor was billed to pay N 1 billion but what was said to have reached the bank’s vault was N 800 million. The balance of N 700 million was given as waiver to the debtor.

In another bank, a customer who was said to be owing N 7.5 billion had his entire indebtedness written off. In some of the other banks negotiation on wavers have collapsed and those who can afford litigation are using the courts as shield because of the long and tedious process in litigations.

There are no measure in place other than arbitration and law suits in the financial system for debt recovery when an individual’s debt profile has risen to N 170 billion with doubtful repayment ability in a growing economy as that of Nigeria This matter is a major test for the Nigerian economy and credibility of state administration since the matter has been celebrated on online media platforms.