The Asset Management Corporation of Nigeria (AMCON) is being accused of perpetually holding on to the asset of a company Knight Rook Limited despite court judgment. Kenneth Atavti writes.
Although the Asset Management Corporation of Nigeria Amendment (AMCON) bill was passed by the Senate recently, it appears more needs to be done to convince the populace on AMCON operations.
The passage it was learnt was done after the Committee on Banking, Insurance, and Other Financial Institutions considered a draft.
Meanwhile, stakeholders and concerned citizens have continued to advocate that some of the provisions in the AMCON amendment must be clearly spelled out so as to avoid witch-hunting and overzealousness on the part of the authority concerned.
This medium recalls that during the clause-by-clause consideration of the bill, Deputy Senate President Ovie Omo-Agege (APC, Delta Central) raised a poser on the recommendation in clause two, which empowers AMCON to take possession of properties other than those used as collateral in securing a loan request.
He said, “The essence of collateral is that in the event of default, you lose that asset. What I am reading here is that in addition to seizing that asset, they (AMCON) want to go beyond that to every other asset or property that is traceable to the debtor.
I think I need some clarifications to that, he said.
Another legislator, Senator Bassey Albert Akpan (PDP, Akwa-Ibom North East), argued that, “you cannot go outside the asset presented for the facility.”
In his ruling on the matter, Ahmad Lawan, the Senate President, called for a vote on the controversial provision, which was ultimately ratified by the majority of lawmakers.
While dwelling on related matter in a petition by one Awosedo Olajide, which was written on 27th February, 2019 and addressed to The Managing Director of Asset Management Corporation of Nigeria (AMCON), Alhaji Ahmed L. Kuru, the company said it had won a case to void the illegal sale of its land by Sterling bank, and notified the company of its proposal to pay the outstanding obligations from the land its won in the judgment.
In the petition which was written by the company as a way of preventing AMCON from selling its property, they reminded the Corporation that its counsel, Messrs Bonajo Badejo & Co actually wrote to AMCON on 15th June 2017 to formally notify the Corporation that we had won our case to void the illegal sale of our land by Sterling bank, and a proposal to pay the outstanding obligations from the land we won in the judgment.
The company alleged that AMCON has frustrated every effort it made to settle the account, in order to protect the transaction that was voided by the court. In the process, a lot of questions came up as to why AMCON should violate its own Acts by allegedly supporting insider trading and secret deals of Sterling bank and its Directors.
The company was quoted as saying “We must remind you that the collateral for the loan obligations has always been (and remains) our shares of which we pledged to the banks and by extensions to AMCON as security in accordance with the provisions of the MoU and Share Transfer agreements between us.
Meanwhile, the judgment of the Lagos State High court in the UPDC case as obtained by this medium confirmed that the shares were indeed transferred as Security for loans, and not an outright sale to the banks, as allegedly claimed by both AMCON and the banks at different times.
The company alleged that “The 10 hectares land which is part of our collateral and which Sterling Bank Plc illegally sold to its Director, Mr Yemi Idowu is now in your hands in accordance with the Lagos High Court”,
In another petition dated January 20, 2021, and addressed to the AMCON MD, the company alleged that there was a deliberate effort by AMCON to divert proceeds from its assets.
The petition read: “I write in response to your letter dated 9th December 2020.AlhajiKuru, please permit me to refer you to our last meeting in your office on 30th November 2019, where my sister, Mrs. Olamidayo Olukoga and I met with you to discuss the resolution of our account.
You made some points very firmly in that meeting, which I would like to avert your mind to.
“You insisted that AMCON had an absolute duty to render account for the assets that are recovered from its customer. You were very clear.
You also stated clearly that we had a right to ask for an account. Indeed, your words were, “you have a right to demand a statement of account and AMCON has a duty to present a transparent account to you”.
You reminded us that this was an establishment principle of law and banking, which no one could deny.
“When we reminded you that the Receiver Manager had written to state that assets that were sold would not be applied toward our account, again you were very unequivocal in stressing that this could not be so.
You were adamant that the value of any assets recovered would be applied to the account. Not only did you dismiss the claim by your own receiver manager, you were also very clear instating “those are your assets. Nobody can sell your assets and refuse to apply them toward your account.
“If AMCON have (sic) taken over your assets for a purpose, we must apply it to your account. We have a duty to tell you what we have done with your asset, and you have a right to ask us. And if we have recovered more than you owe, you have a right to demand a refund of excess, which no one can deny you.”
“Finally, you made a firm and unambiguous promise that you would direct your management and the receiver-manager to render an account. You also reminded us that as the MD, you have the authority to direct the receiver to present a statement of account, and you made a firm promise that you would do so immediately. You spoke with knowledge, confidence and experience, and you assured us of your sincerity. You made a firm promise which we felt confident to rely on. “It was therefore quite alarming to read your letter, which stated:
“we hereby reiterate, as indicated in our response to your previous correspondences on this subject, that AMCON is not accountable to you, Grant Properties Limited or any other obligor regarding assets recovered thus far in execution of the judgment of the Federal High Court delivered on 3rd October 2017 in the SuitNo: FHC/L/CS/744/17 – Asset Management Corporation of Nigeria v. Knight Rook Limited &Ors.
“This is more so, as you have persisted. In disputing the debt, as evidenced by the processes pending before the Supreme Court, notwithstanding that the Court of Appeal had affirmed the judgment”.
The company condemned the move, saying it was contrary to the letter and the spirit of collective and individual assurances on the matter.
“We have always maintained that we wanted to settle the account in full, and that we had the means to do so, and we actually sent you a proposal to settle the account in full before AMCON took over our business. You will recall that our counsel, Messrs Bonajo Badejo& Co wrote AMCON on 15thJune 2017, with a clear and definite payment proposal, to settle the account.
“Indeed, this proposal should have resolved the account immediately, thus preventing the unfortunate events which have since occurred, but for some reason AMCON was more interested in taking over the entirety of our assets and business than simply recovering the sum owed.
“To date, AMCON has never presented a statement showing the sum owed, and how the figures were arrived at, which is fundamental in any debt resolution. We have asked, “how much is the debt, and how did you calculate it?” but we have received no answer to this most basic of questions.
“However, from our first meeting with AMCON we were informed that the total debt due was₦8.5 billion, which included all fees due to the Receiver Manager under standard AMCON procedures.
“We were also informed that we could get a discount of ₦1-2billion, with the approval of the Central Bank of Nigeria (CBN). Sequel to this, we were told the debt had grown to ₦22 billion, and then ₦33 billion, but no account has ever been presented to explain these claims.”
“Indeed, the only explanation we were given by AMCON was that the debt was increased from ₦8.5 billion to ₦22 billion based on our, “posture”. In this case, our posture was simply pleading that you manage and value all of our assets in an objectively fair, legal, and logical manner, to ensure that we derived the best value to settle the debt, thus securing our discharge so that we can continue our business in peace.
“We asked for an independent valuation of our assets that would be applied toward the debt obligations – how was this a bad thing? It also appeared from the outset that there was a deliberate effort to divert proceeds from our assets.
First, when we complained that property –owners should not be charged ratification fees, since the debt had nothing to do with them, AMCON insisted that the third parties must pay, and that the proceeds would not be applied toward our account. “Thus we asked who would this money accrue to and why? And why take money from innocent third parties when the obligor had the means to settle the debt in full?
Second, after insisting that the debt had grown to N22 billion without justification AMCON proposed that all of our assets would be recovered and sold, that we would be discharged after N8.5 billion was recovered, while the balance would be over N13 billion would be kept as profit for AMCON, curiously, both conditions were brazenly inserted into the terms of settlement proposed by AMCON.”
Again, we asked if the debt was N8.5 billion, why was AMCON insisting on N22 billion. Mr Jallo will recall rejecting those conditions and insisting to the receiver that ‘that debt is N8.5 billion, AMCON is satisfied with that sum, we do not want a penny more.
“Perhaps,Mr Jallo has changed his mind about what AMCON stands for, and what theCorporation mandate is? or is it just our faces that you do not like? All we have simply been asking is, how much do our companies actually owe, the company asked?”
“We are now well into the fourth year since AMCON sealed our business, you have cut off our livelihoods, taken over our homes, and caused untold hardship to innocent third parties. In this time, assets worth billions have been destroyed or sold.
Before you take the drastic step of winding up our company and destroying what we have built, all we are asking for is an account to enable us to determine how much of the debt has been settled through the recovery of our assets – what is so strange or offensive about this uncomplicated request?
“Please permit me to ask, if you do not render an account, then how do you intend to resolve this case, and when will we be free? At what point will you discharge us, or is this to be an open ended campaign? At what point will all the innocent third parties be free to enjoy their lives and property without the overwhelming presence of AMCON and its receiver manager handing over their heads? Are they to live under threat forever?
“We have said that assets recovered from us thus far are more than adequate to settle the sum owed – in essence, we have paid the debt in full, which will become apparent if you render a fair and transparent account.
However, the company demands that AMCON should be stopped from further intimidating it using Mr Lanre Olaoluwa, their appointed receiver; and accused AMCON of desperately protecting Sterling bank in an spirit de corps fashion.
It also asked for the immediate unsealing of all premises sealed by the receiver, and return of all properties taken away, in the condition in which they were removed.
The company also sought the immediate release of all its frozen corporate and personal bank accounts.
“On the full discharge of our obligations, the final release of all charges, the return of our security and issue of a letter of release confirming that we have paidour debts and have no further obligations to AMCON ”, the company demanded.
However, efforts to get reaction from AMCON for its own side of the story over the allegation made against it were futile as calls made to its Corporate Communications Head and spokesperson, Jude Nwauzor were not successful as at the time of filing this report.
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