By Ovie Edomi
Recently, the Civil Liberties Organisation, a human rights organization, in a press conference on a recent court order in a matter involving AMCON and Peace Global Satellite Communications Network (PGSC), disclosed some fundamental issues in AMCON’s operations.
AMCON was established by law in 2010 to buy bad debts from banks using money from Treasury Bill in order to stabilize the country’s financial institutions. The entire concept was to make banks liquid by buying toxic loans from banks and liaising with the Obligor/Debtor to provide the Obligor/Debtor with a conducive environment to repay the debt.
AMCON no doubt, has the capacity to achieve financial stability of both the financial and productive sectors because it sources its funds from the Treasury Bill via CBN at 6% rate of interest. This certainly is sufficient to stabilize the Financial Sector and at the same time provide Obligors/Debtors a soft landing to operate and pay back their loans.
This way, Obligors will be able to retain their staff strength instead of allowing them to throw their workers back to the already saturated labour market. A development that is adding to the crime rate in Nigeria.
However, past and recent actions of AMCON officials, particularly, its calculations of an obligor’s debt and its attitude towards court orders, suggest that they are more interested in taking over obligor’s properties instead of creating a conducive environment for such debts to be paid. Thus, I am compelled to ask- “Was AMCON established to generate profit or to stabilize the financial sector?”
Calculation of an Obligor’s Liability
Prior to AMCON’s inception, PGSC allegedly borrowed N178m from WEMA bank of which N162m was repaid leaving N16m on principal. Sometime in 2008, thunderstorm destroyed PGSC network in 2008, which led to a court dispute in 2009 where PSGC alleged nonpayment of the insurance claim, while WEMA bank was intent on selling PGSC’s collateral for the loan-Peace Hotel, Lagos. In 2012, WEMA bank sold the debt to AMCON for N123m claiming that PGSC was owing the bank N240m on principal. Despite PGSC’s denial of WEMA Bank’s claim, AMCON went ahead to use a whopping N421M as an index amount to calculate PGSC’s liability and at 15% interest rate.
For an organization whose reason for existence is to buy bad debt with the aim of restabilizing the economy, this is counterproductive. One would expect that AMCON could charge a 3% maximum mark up on the 6% Interest; thereby making the interest rate to be single digit in order to encourage growth and easy loan repayment. In fact, it will be killing for AMCON to charge interest rate that is above 10 percent having obtained its loan from the CBN/ Ministry of Finance at 6 percent interest rate. Even banks, at the worst scenario, write off bad debts and grant interest free loans.
If AMCON was not established to make profit, it therefore implies that, AMCON has not generated profit for the Government since inception. If this is so, why then did the Chief Executive of AMCON, Ahmed Kuru disclose, at a two-day annual seminar organized by the National Judicial Council and Legal Academy for Justices of the Courts of Appeal, that the corporation is owing CBN more than N4 trillion and that this debt could rise to N7 trillion by the year 2024 at the current rate of inflation? It beats my imagination that AMCON is talking of its debt growing from N4 trillion to N7 trillion in four years.
Across Nigeria, AMCON has taken over countless corporate and individual properties and in most case sending the workforce of most corporate organization back to the labour market adding to high unemployment rate. For instance, former Super Eagles captain, Kanu Nwankwo, had his hotel in Lagos taken over even while the matter was in court.
However, if AMCON has generated profit for the government in the past 12 years, the revenue head under which AMCON been paying such profit to the Government Treasury, as well as the record of such profits should be made public, as done by Nigeria Customs Service, Federal Revenue Service, JAMB, NPA, NIMASA and others.
AMCON’s Attitude to Court Orders and Judgments
During the earlier-mentioned press conference, AMCON boss noted that the corporation has many back-logged matters with different courts and called on them as ‘sister agencies’ to join forces with the corporation to ensure that debtors pay up the debt.
This statement is problematic because, for one, there is no legal basis for the acceleration of AMCON cases over others. AMCON’s Chief Executive complained of several legal cases pending in the Courts of Appeal. What he failed to tell the populace is that this bizarre development is equally as a result of the disturbing attitude of AMCON’s lawyers, its Receivers and in some cases misrepresentation of figures by some banks as at when they were packaging the loans for sale to AMCON.
For instance, in the PSGC case, the Managing Director of Peace Hotel, Lagos alleges that in July 2020, without being served any court process, a bailiff of Federal High Court Sheriff, was at his property to present a Court Order for possession dated 9th March, 2020 issued by Federal High Court, Abuja. The order expires if the defendant isn’t placed on notice within 14days. Furthermore, the Writ of Summons dated on the 20th March, 2020, in the supporting Affidavit, claimed that the matter was not pending before any court whereas it was pending before the Supreme Court.
Despite these irregularities and the discharge, by the Federal High court, of the ex-parte order which was earlier secured by AMCON, the corporation still maintains security guards in uniform at Peace Hotels, Lagos and at the Lagos residence of the Managing Director of Peace Hotels.
Secondly, the courts are not “sister agencies” to AMCON, but part of the judiciary, an independent arm of the government. When AMCON refers to them as “sister agencies”, the impression created is that whosoever owes AMCON owes the Federal Government and as such the judges should assist AMCON to recover the debt. This is wrong because the judges are to declare the law as it is without fear or favour. The law is ‘BUYER BEWARE’ so AMCON should conduct due diligence before buying any debt instead of buying a bad debt hoping to cure the legal defect in the transaction by appealing to the sentiments of the judges that Federal Government’s money is involved. Whosoever put the Federal Government money into a legally defective transaction should be blamed, and possibly sanctioned, instead of transferring such malfeasance to investors.
Curiously too, in a judgement delivered at the Court of Appeal in a case between AMCON and Adedayo Shittu, the court ruled on 15th December 2020 that the obnoxious provision of section 34(6) of the 2019 AMCON Act clearly runs against, and is inconsistent with the provision of section 6(6) of the Nigeria constitution to the extent of it being inconsistent with the provision of the constitution, null and void. The implication is that the power derived from AMCON Act which allows the corporation to sell off obligor’s property when matter is still in court has been removed from AMCON.
To ignore this, means that AMCON operates above the law. Montesque propounded the theory of Separation of Powers which is the antithesis of concentrating all powers in one person or body of persons because power corrupts, and absolute power corrupts absolutely. The present management of AMCON has the power to ‘kill’ any company which has any problem with any bank. This is not healthy for our country in a democratic dispensation. The worst form of injustice is evil dressed in the gab of law.
Consequently, l support the recent call by the Civil liberty Organization, on President Major General Muhammadu Buhari (retired), to prevail on Mr. Ahmed Kuru (MD, AMCON) to obey court order and withdraw with immediate effect the 8 AMCON security guards that had been laying siege at the business centre of Barrister Oreye and his residence despite the vacation order in obedience to the judgement order on vacating / discharging dated 24th day of November,2020 before his lordship.
AMCON being a machinery of Government meant to protect the financial and productive sectors of the economy should be seen acting above board and not oppress innocent citizens which is not part of the agenda of President Muhammadu Buhari for AMCON and Nigerians
*Ovie Edomi, is the Publisher/Editor-In-Chief of South South International.
*The views and opinions expressed in this article are entirely those of the author and do not represent the official policy or position of Legal Business