Inside Details Of AMCON’s Renewed Debt Recovery Drive From Debtors List With Seawolf, Ifeanyi Uba, Badamosi Family, Kashamu Buruji, Wale Babalakin Sitting Comfortable As Leaders

According to a report available to societynowng.com

DESPITE repeated warnings by the Central Bank of Nigeria (CBN) to the Deposit Money Banks (DMBs), it does appear that most of them have continued to expose themselves to high risk ventures, such as granting credit facilities to politically exposed persons (PEPs) and so-called high net worth individuals with a history of credit default thereby jeopardising investors’ deposits.

This was clearly the case that informed the Bank Consolidation Reforms in 2008 under erstwhile CBN governor, Prof. Charles Soludo, which exposed the underbelly of insider wheeling and dealing in the nation’s banking and financial services sector.

But it didn’t stop there. There were further banking reforms by the immediate past CBN governor, LamidoSanusi, which led, among other things, to mergers and acquisitions of weak banks by stronger ones and the establishment of the Asset Management Corporation of Nigeria (AMCON) on July 9, 2010 as a resolution vehicle to purchase the non-performing loans from banks, inject liquidity into the banks and subsequently recover the purchased bad loans.

Wave of antagonism against AMCON

Although as a body, AMCON clearly has its job cut out for it. The irony, however, is that it has not had a smooth sail thus far, what with the different battles confronting the Corporation on many fronts fuelled in part by recalcitrant debtors whose stock-in-trade includes seeking one court injunctions to the other to frustrate genuine recovery efforts such that cases are allowed to drag in court far too longer than necessary.

This perhaps informed why a Chief Judge in one of the Federal High Courts, relying on sections 53 and 61 of the AMCON Act, issued a Practice Direction in 2013 for fast-tracked hearing of all AMCON cases. Things have improved a bit ever since.

But The Nation can authoritatively report that under the current AMCON management, a number of innovations have been introduced and the tempo of recovery activities and court orders have enabled the Corporation to carry out enforcement on assets and businesses in recent times.

Chief among these reforms is the setting up of the presidential committee on loans recovery by the federal government.

The committee headed by the Minister of Justice and Attorney General of the Federation (AGF), AbubakarMalami (SAN), is to coordinate the recovery of loans owed to AMCON.
Justifying the need for the committee, Malami said the debtors, who cut across the aviation, banking and the oil and gas sectors, failed to repay the loans, while some of them resorted to court actions all in their bid to frustrate the loan recovery efforts of AMCON.

The AGF argued that the failure of debtors to repay what they owed informed President Muhammadu Buhari’s approval and directive for the establishment of an inter-agency committee to effectively pursue the loan recovery.

Among the terms of reference of the Committee are; to ascertain the status of AMCON recoveries in terms of achievement from inception to date, as well as the total outstanding namely value of assets; and to ascertain how government at various levels can be made to honour their debt obligations to the Corporation.

Besides, it is also to request and obtain information from any person or persons and/or entity or entities onshore and offshore with the full support and weight of the federal government and its agencies towards the pursuit and realisation of the Committee’s mandate as well as to assist in third party investigation outside AMCON office relating to obligors and identify the criminal nature of commercial transactions that would assist in pursuing criminal prosecutions.

In addition, the Committee will ascertain how government agencies can collaborate to support AMCON’s recovery effort in; ensuring payments due to obligors are made to AMCON, the possibility of going into a joint venture agreement with AMCON, the acquisition of forfeited assets from AMCON and take-over of recalcitrant businesses/companies where feasible.

It is also expected to establish the working framework for the Committee such that AMCON would have direct contact with the agencies for assistance and report to the Committee on achievement and challenges as well as design and come up with workable strategies to pursue aggressive recovery of the AMCON loans.

Expectedly, with the full weight of the federal government behind it, AMCON has since appointed Asset Management Partners (AMPs) to assist in the resolution of over 12,000 accounts with loan balances of N100 million and below. The AMPs are consortia with specialist skills to recover and resolve debts in banking, legal, valuation and accounting.
At the induction ceremony in Lagos recently, AMCON Executive Director, Kola Ayeye, said collaborating with AMPs would ensure that the total loan portfolio of over 12,000 accounts of various sizes and sectors still lingering for over six years are established.

“We are convinced that the AMP programme is key to the success of AMCON, and we will give them all the necessary support to make them succeed in this exercise. A new sub-sector should emerge with desirable job creation and multiplier impact,” Mr. Ayeye said.
The Executive Director urged the AMPs to take the assignment seriously as AMCON intends to nurture its transformation into the preferred model for recovery and resolution of non-performing loans, NPLs in the banking sector and financial services industry.

AMCON said the AMPs is to be vested with the powers granted by the enabling Act, and would, among other things, work with it to trace, identify and locate obligors (both pledged and unpledged) to resolve their outstanding indebtedness.
They would also be involved in tracing, identifying and locating assets of obligors to enhance the Eligible Bank Assets (EBAs) value and achieve set recovery objectives, negotiation of settlement and restructuring terms with identified obligors in line with approved guidelines.
Renewed onslaught.

As a proof that it’s not a toothless bulldog after all, AMCON had last week embarked on a renewed onslaught against those it described as chronic debtors. Among those who tasted AMCON’s bitter pill was the Silverbird Group, owned by Senator Ben Bruce family, over N11 billion unpaid debts.

The Nation gathered that AMCON secured a Federal High Court (Lagos) injunction to take over the property in Lagos, Port Harcourt and Abuja.

A release obtained by The Nation from the Corporation stated that the Federal High Court Lagos Division on Friday June 17, 2016, granted an interim injunction against Silverbird Productions Limited, Silverbird Showtime Limited, Silverbird Galleria Limited and Senator Ben Murray-Bruce, Guy Murray-Bruce, Roy Murray-Bruce and Janthan Murray-Bruce on the application of Asset Management Corporation of Nigeria (AMCON).

Justice C.M.A. Olatoregun, the presiding judge, while granting the order on the application of counsel to AMCON, restrained Senator Ben Murray-Bruce and other obligors that owe AMCON over N10 billion from challenging, interfering with or otherwise obstructing or frustrating the Receiver (M.A. Banire SAN) appointed by AMCON over the fixed and floating assets of the listed companies belonging to the Murray-Bruce family.

Mr. Murray Bruce and his brothers, using their companies, had between 2005 and 2007 borrowed various sums of money from Union Bank.

But after they repeatedly defaulted in paying back, AMCON purchased the loan in 2011 to save the bank from collapsing.

Reacting to the takeover, Senator Bruce said on his Twitter handle þ@benmurraybruce: “I have been on an international flight and have only just landed. “The situation is being resolved and things will be back to normal.

“In 36 years, Silverbird has grown and like anybody, it will face challenges. Tough times don’t last. But we, as tough people, outlast them.”
AMCON also took over the assets of Afrijet over N10 billion debts just as it secured a court injunction from the Federal High Court in Lagos against NICON Investment Limited, Global Fleet Oil and Gas Limited, NICON Insurance Company Plc, Nigeria Re-Insurance Company Plc, Nigeria Stockbrokers Limited, NICON Trustees Limited, all being promoted by Barr. Jimoh Ibrahim. Jimoh Ibrahim and his entitles are said to be owing AMCON over N50billion of unpaid loans.

But AMCON didn’t stop there. In a move described in some quarters as shaming-and-naming strategy, the Corporation last weekend took a decision to overtly bare the
names of its debtors a few days after the siege to the property of Senator Ben Murray-Bruce -Silverbird Productions Limited, Silverbird Showtime Limited and Silverbird Galleria Limited.

AMCON’s debtor list

The list contained 100 entities owned by prominent Nigerians like Ifeanyi Uba, Wale Babalakin, Senator Buruji Kashamu, Uwamu Adolor and Badamosi Shehu.
Seawolf sat atop the list with a debt of N160.09 billion. The loan was originally taken by the company from First Bank of Nigeria and was bought by AMCOM in December 2011, followed by Ifeanyi Uba’s Capital Oil and Gas Industries Limited with a loan of N104.80 billion from Union Bank, Skye Bank, Zenith Bank, Intercontinental Bank and First Bank while Tanzila Petroleum Limited owned by Badamosi Shehu, Badamosi Safiyah and Badamosi Abdulmalik is owing N49.23 billion which AMCON bought from the now rested Intercontinental Bank and Guaranty Trust Bank.

Resort International Limited owned by Babalakin Olawale Bolanle has a debt of N36.30 billion got from First Bank, Zenith Bank and Enterprise Bank, while Hotel De Island, Kasmal Properties, Island Auto & NACOIL owned by Senator Kashamu Buruji is indebted to AMCON to the tune of N10.80 billion, a loan which was initially obtained from the defunct Oceanic Bank.

Speaking exclusively with The Nation over the weekend, Jude Nwauzor, Head, Corporate Communications, AMCON, gave a fresh insight into what informed the decision to publish the list of debtors.

According to him, the Corporation took the decision in line with the mandate by CBN. Nwauzor, who recalled that it published the list of AMCON top 100 debtors in January, said it was just so to put the affected persons on notice.

“I can tell you that 400 obligors of AMCON account for more than N4.5 trillion, which is approximately 80 per cent of the total outstanding loan balance of the Corporation’s over 12,000 accounts with obligors that have become recalcitrant over time despite obvious efforts of the AMCON.”

Pressed further, AMCON’s spokesman said it currently has under its receivership about 50 businesses and more than 180 businesses under enforcement including the ones already in the public domain.

Visit to companies under AMCON’s receivership
Following the court-ordered takeover of some of the debtor companies last week,The Nation visited some of the companies currently under AMCON’s receivership. Checks by The Nation revealed that a majority of the companies were doing their routine businesses while a few others were still under lock and key.

A visit to Silverbird Galleria in Victoria Island, Lagos, showed that the facilities have since opened for business.

For a first time visitor to the cinema, everything would seem normal except the red inscription on parts of the wall marked ‘Assets taken over by AMCON.’

When our correspondent visited the SilverBird Galleria in Abuja, the place was bubbling with activities.

A visit to Aero Contractors’ Lagos Airport Office at the Private Terminal Domestic Wing ofMurtala Mohammed Airport Ikeja showed that its operation was going on. Aero is one of the companies under the receivership of AMCON. Aero was wholly owned by the Ibru family but AMCON now owns 60% of the shares, with the remainder owned by Ibru family interests.

At Aero Contractors’ office, a chat with the front desk officer, who simply gave her name as Lara, was noncommittal when our correspondent asked to see any of the managers, as she insisted on getting a written letter before she could refer our correspondent to her bosses.
However, speaking in an interview with Simon Tumba, the publicist in charge of Aero Contractors, it was confirmed that AMCON owns 60 per cent stake in the airline while the Ibru family owns the rest.

According to him, the airline is going through some restructuring right at the moment. So the parlous state of the airline is not really a function of AMCON’s intervention.

“Running an airline is probably one of the toughest businesses around unlike other sectors of the economy. Even before AMCON’s intervention, the airline was in a terrible state financially. Its fleet had depleted before AMCON waded in,” he said.

Speaking further, he said: “Nearly almost all the airlines operating in the country today are doing so under very tough operating environment. So this is not peculiar to Aero. It’s not exactly an abnormal situation as it were.”

When The Nation visited Afrijet Plaza, along Opebi Link Road, Ikeja, Lagos, which houses the administrative and ticketing sales offices of Afrijet Airlines, on the fourth floor, the place was under lock and key.

A lady who spoke with our correspondent on the fifth floor confirmed that the place was sealed off last Thursday and the staff had not been seen ever since.

How receivership works
In a chat with one of the receiver managers of AMCON, who asked not to be named, he confirmed to The Nation that there are grey areas in AMCON’s Act. A number of people have expressed worries about the powers of AMCON, which in their opinion if maliciously exercised could spell doom for the debtors especially.

Speaking with Ms. YemisiTolulope, a lawyer, she said there are sections in AMCON’s Act, which empower the Corporation to sell off recovered assets as well as take up those owned by relatives of the principal debtor.

Giving a hypothetical situation, she said: “If for instance the Corporation sells properties of a debtor and it doesn’t measure up to what he’s owing, the law empowers AMCON to take his wife’s own so long as it can prove that his wife had any relationship with him. And if the wife’s own is not enough, we’ll go and take the son’s own because the court will prove it that the wife or the son has benefited from the profits of so and so proceeds. That’s how powerful the law is.”

Echoing similar sentiments, in an article titled: ‘Recent Strides In Nigerian Insolvency Law – Banking Insolvency & AMCON Act’ penned by Anthony Idigbe and OkorieKalu, both Senior Partner and Partner at PUNUKA Attorneys & Solicitors, Lagos, Nigeria, they observed that the AMCON Act has some ouster clauses which grant unfettered powers to the Corporation and its appointed agents.

Specifically, they said the amendment made on AMCON Act on May 25, 2015 placed the debtors in a very dicey situation.

“One likely area of contention is echoed by a new Section 48(3) which states that the powers of the receivership appointed under the AMCON Act would extend to all assets and undertaking of the debtor company notwithstanding that only part of the assets of same was charged or pledged as security in relation to the eligible bank asset.”

While noting that the Act considerably strengthens AMCON’s position as a virtually absolute super creditor with all manner of statutory shielding and powers, the duo of Idigbe and Kalu emphasised that the impact of the 2015 AMCON Act amendment for general business rescue arguably remains limited by the fact that the choices provided are only available to AMCON appointed receiver.

“There is no right given to any debtor to apply for protection of automatic stay upon a plan to be approved by the general body of creditors. However, we are of the belief that we are at the twilight of an incoming tsunami of reform in the area of general insolvency law in Nigeria.”

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