Senate Queries N5.6Bn to AMCON, Says Company is a Failure

The Senate yesterday, lamented the failure of the Asset Management Company of Nigeria (AMCON) and demanded a probe of the N5.6 trillion pumped into the Company by the Central Bank of Nigeria (CBN) since inception.

This is coming on the heels of the recent call by the International Monetary Fund (IMF) on Nigeria to wind down AMCON.

The senators who alleged ineffective use of the huge sum sunk into the company, also said, that AMCON has failed to live up to its objective of recovering toxic debts owed by some commercial banks after some three years in business.

The Senators waxed worriedly during the consideration of a bill to amend the AMCON Act, which scaled second reading in the Senate yesterday.

The Bill tagged  "Act to Amend Asset Management Corporation of Nigeria Act 2010," among others, seeks to establish a corporate entity with a well constituted Board of Trustees drawn from CBN, eligible financial institutions, National Deposit Insurance Corporation (NDIC) and Ministry of Finance to make regulations for the supervision and management of AMCON fund..

But the Senate mandated its Committee on Banking, Insurance and other Financial Institutions chaired by Senator Bassey Otu, to find out the exact amount CBN had pumped into AMCON and how effectively it was used in the execution of its mandate as well as how much it has recovered so far.

Senator Ita Enang, chairman, Rules and Business Committee, said the sum exceeded Nigeria’s yearly budget with the allegation that since the company commenced operations, it has failed to recover up to 15 per cent of the entire money.

He advised the committee to examine the functions and operations of AMCON, adding that it was “disheartening that the organisation appeared to be failing because the amount committed to it by CBN was not free money but a loan meant to be paid to the Federation Account.”

Leading the debate, Senator Otu, said the bill seeks to prohibit any board member or an employee of AMCON from being directly or indirectly involved in the purchase of assets acquired by the corporation.

He also said the amendment bill sought to empower AMCON to acquire assets that are already subject to litigation if there is no valid court order restraining it from doing so.

David Mark, Senate president,  noted that if the toxic debt that AMCON was mandated to manage was not yielding any fruitful result and the Federal Government was now asked to subsidise it, those found culpable in the fruitless exercise must be punished.

The committee is expected to report back to the Senate in two weeks.