INVESTORS BEMOAN DELAYED TAKE OFF OF AMCON
Investors have bemoaned the delay in the Asset Management Corporation of Nigeria (AMCON) getting assent from the President, Dr. Goodluck Jonathan.
Most of the investors, who linked the delay to the continued dwindling performance of the capital market,say most of the banks that would have released the clog- ing loan facility are tying their action to the awaited AMCON.
According to Engr. Julius Okafor, the document prior to delivery to the National Assembly (N/A) could be guaranteed. He said that after both chambers of the N/A have gone through it, some amendments are expected either in function or in application. This resulted in most of the investors holding their business resolutions in abeyance. 'As a matter of fact the conditions that would go with the bill after it has been passed into law is not clear. So who knows whether it will tend towards easing the plight of the borrowers or the lenders? One will know first which way it will go before taking business decision,' he said.
Another investor, Timothy Babatope, a production manager in one of the Flour Mills in the country said that instead of putting some money into the market, he is even consistent in pulling out money to finance other investments. He said that the continued drop in the fortunes of the market is crashing investors' wealth pot.
According to him, it is high time Federal Government fast tracked the presidential assent to give impetus of law to the AMCON. He said that the market reacted positively to the passage of the bill by both chambers of the Legislature. 'The same positive reaction is trailing the delay in correspondent magnitude. If the presidential assent is given now, the market will again react in the positive way,' he said.
It will be recalled that the Senate unanimously passed the Asset Management Corporation of Nigeria (AMCON) bill 2010 after its third reading. At the inception of the plenary, the Chairman, Senate Committee on Business and Rules, Senator Aloysius Etok explained that the bill had earlier passed the second reading at the Senate where it was directed that three committees namely: – Banking, Insurance and other Financial Institutions, Capital Market and Finance should conduct a public hearing on the bill and submit a report to the Senate.
The Senate Leader, Senator Teslim Folarin had earlier moved the motion for its consideration and was described by Senator Nkechi Nwogu as 'very crucial to the banking sector and has the objectives to lessen the burden of CBN on Deposit Money Bank (DMB) loans.' She also said that it would 'strengthen the banking sector as well as give synergy to the entire financial institutions, improve liquidity of the DMB, provide vehicle of acquisition of shares of banks, maximize returns on Asset Disposal and encourage investment in Capital market.
'The AMCON is the principal vehicle for resolution of the asset quality problems that have risked the banking system in the last two years and it provides an alternative to the liquidation of distressed banks. In addition to purchasing non-performing loans from the banks, AMCON is also designed to be a vehicle for recapitalizing these institutions. It also holds the promise of reducing the debt overhang on capital market operators, thus giving the much-needed stimulus to the capital market,' she said.
During the consideration of the bill transmitted live on the network service of the NTA, senators spoke in support of the establishment of AMCON. It will be recalled that the CBN through the Federal Executive Council had sent a bill for the establishment of AMCON to the National Assembly for consideration and passage into law. The House of Representatives had on March, 10, 2010 passed the bill after adopting the report of the House Committees on Banking and Currency, Finance and Capital Market, while awaiting similar process by the Senate.
In view of the passage of the bill in the Senate, a harmonization Committee is expected to be set up to harmonize the bills as respectively passed by the two chambers. As soon as this was dispensed with, the bill would have been enacted into an Act of the National Assembly ready for the assent of the President.