Managing Director/Chief Executive Officer, Asset Management Corporation of Nigeria (AMCON), Ahmed Kuru, at the weekend in Abuja stressed the importance of receiver managers to the successful recovery of the outstanding N5tr debt before its sunset.
Speaking at the two-day maiden seminar for AMCON Receivers/Receiver Managers on General Enforcement, Kuru said the corporation has “developed a new Receivership Framework, which will henceforth govern our relationship in terms of management of the assets and accountability.”
This, he continued, is in a bid to there is no confusion in the performance of their tasks, while streamlining the functions of the Receivers, while making them more effective and accountable.
Should the corporation fail to recover the entire outstanding debt before its sunset, the burden will automatically pass to the Federal Government for eventual settlement by taxpayers.
The AMCON Chief Executive, represented by Aliyu Kalgo, the Group Head, Resolution Strategy, said the implication of such failure is that Nigerian taxpayers will pay for the recklessness of a few individuals who continue taking advantage of loopholes in the nation’s laws to escape the moral and legal obligations to repay their debts.
He challenged all AMCON partners, especially in the receivership business, not to allow a few individuals escape with the commonwealth of all Nigerians, warning however that whatever step are taken in the process must strictly comply and be within the confines of the law.
“We have had course to disengage some of our Receiver Managers due to non-performance. We did that because assets are being abandoned without cause or plan to come out of the debt. And at times, Receiver Managers are confused about their responsibilities. Therefore, I urge the participants to partake actively in this interactive session and share some of their experiences with one another so that we can all succeed in our collective efforts to recover the over N5trillion from these recalcitrant debtor, which is a national assignment,” the AMCON Boss said.
Also speaking, Dr Francis Chuka Agbu SAN, Senior Partner, Lexavier Partners and Alheri Nyako, Chief Executive of Alheri Legal and Allied Services Consulting, a former Board Secretary/Director Legal at the Nigeria Deposit Insurance Corporation (NDIC), listed the many possibilities AMCON can leverage on to hasten recovery.
These, they noted, is given the enormous powers of receivership as well as winding up and bankruptcy proceedings in the AMCON Act, as amended, which they described as undisputable and potent tools for debt recovery.
Agbu, who was also represented by Mohammad Sani Umar, described receivership as the most effective debt recovery tool within the current insolvency/debt recovery regime.
He challenged AMCON to take maximum advantage of the Act to help Nigeria, especially now that the Federal Government needs a lot of funds to bridge the nation’s financial challenges already heightened by the outbreak of the dreaded Coronavirus (COVID-19) pandemic.
He said, “Receivership, as a debt recovery strategy, is arguably the most effective debt recovery tool within our current insolvency/debt recovery regime.
“This is primarily because of the control, which it gives to the debenture holder/creditor over the assets, or the assets and business of the debtor company. By virtue of section 393(4) of CAMA, upon appointment of a Receiver and Manager, the powers/control of the directors over the debtor company become immediately suspended. Even where the Receiver is not empowered to act as Manager, he retains executive control over such portion of the company’s assets, which have been charged.”
“The AMCON Act has further extended the powers/rights of AMCON-appointed Receivers beyond the scope of CAMA and the general principles on receivership. Firstly, pursuant to Section 48(3) of the AMCON Act, the Receiver’s powers to assume control over the assets of the company is not limited to the assets, which have been charged under the Eligible Bank Asset (EBA), but also included unpledged/uncharged assets.
“This extraordinary provision bestows a far-reaching advantage on AMCON in the realisation of outstanding EBAs by enabling AMCON to sustain maximum pressure on the debtor company (including its officers and shareholders) and increasing the pool of assets from which AMCON may realise the indebted sum,” he stressed.
On his part, Alheri insisted that AMCON must activate winding up and bankruptcy proceeding in its debt recovery drive, arguing that Section 52 of the AMCON Act has already provided for winding up of a debtor’s company upon a demand notice for a liquidated sum owed and failure to pay in full within 30 days, thus, making the inability to pay a debt a ground for winding up under the AMCON Act, which is similar to Section 408 (d) of CAMA.”