TheNigerianVoice Online Radio Center

AMCON TO TERMINATE BANKS' DEBT COLLECTION CONTRACTS

By NBF News

AS part of measures to give the Asset Management Corporation of Nigeria (AMCON) the teeth to run its newly acquired delinquent debt profile from the rescued banks, the corporation yesterday hinted it would within the next six months disband all debt collection contracts between banks and contractors.

Managing Director and Chief Executive of AMCON, Mr Mustafa Chike-Obi , who dropped the hint at the 12th annual general meeting of the International Chamber of Commerce (ICC) , in Lagos, said the initiative was to enable the corporation unfold fresh guidelines on debt collection that will enable it emerge as a world class asset management company.

The AMCON chief executive who said the organization has so far spent about N1.7trilion to acquire about 90 per cent of banks' toxic assets, stated that its enabling statutes has given it substantial powers in matters of debt collection which may not sufficiently expressed under existing contracts that various banks have with debt collection agents in the economy.

He explained that the impending debt collection policy will ensure that AMCON meet its obligations of turning such liabilities into assets that would create value for Nigerians in the areas of job creation and enhanced productivity. In the light of the new development, the AMCON boss hinted that its new debt recovery philosophy was to assist delinquent borrowers who genuinely deserve to be assisted in resolving their indebted, while those who show no seriousness in addressing their problem would be harshly dealt with in the impending dispensation. He said the corporation would not hesitate in recommending the closure of unprofitable businesses in the process of its operations if it is in the best interest of the nation and her economy.

Consequently, the corporation would soon commence the engagement of consultants, including lawyers, facility managers, valuation experts and accountants who would be working for it over the next two years to ensure effective coverage of its mandate. When the ongoing processes are fully activated, AMCON which would have a total workforce of about 300 staff according to him may become the largest consumer of consultancy services on the entire African continent.

Chike-Obi further stated that part of the policy was to keep the Nigerian economy stable and growing by ensuring that the creditors have access to liquidity that will help oil the wheel of the economy, stressing that this would be achieved by engaging the best hands to do the job in a transparent manner. He assured that AMCON would not engage in any form of under hand deals in the handling of its onerous duties, but that all transactions will be guided by strict corporate governance principles.

Asked whether the corporation would impress on banks to revise high interest charges on some of the facilities, Chike Obi said 'AMCON has no supervisory or regulatory roles over the banks and therefore would not interfere in their relationship with customers, but we will not accept as valid any punitive interest above 15 per cent simple interest charges.'

He said that the corporation would not buy facilities that are performing, even as he advised that matters relating to debt restructuring was more complex than many commentators are thinking and would therefore require proper evaluation of a number of variable before being concluded . According to him, a lot of issues including cash flow of the borrower would need to be considered when handling any form of facility restructuring.


THE MORE INCOME YOU MAKE, THE MORE EXPENCES YOUN MAKE.
By: Reginald Solomon, SO