An Ad hoc Committee on Undue Accumulation of Debts and Alleged Fraudulent Sales of Banks in the House of Representatives has expressed concern over the undue accumulation of N5 trillion (about $25 billion) debts bought over by the Asset Management Corporation of Nigeria (AMCON) and its inability to recover same.
The Committee, headed by Hon. Albert Adeogun, revealed the current debt portfolio of the Corporation is N800 billion above the ceiling stipulated by the Central Bank of Nigeria (CBN).
The report indicated that the Corporation’s balance sheet has a shortfall of N3.8 trillion (about $19 billion), pointing out that the geometric accumulation of debts by AMCON will no doubt endanger the dwindling national reserves put at $30 billion at that time, particularly as the Federal Government stood as guarantor for AMCON’s bonds as enshrined in Section 27 of AMCON Act, 2010.
On its investigation into the sale of some domestic banks, Bureau of Public Procurement (BPP) denied participation in the acquisition and sale of assets of banks, as the Corporation failed to obtain the Certificate of ‘No Objection’ prior to March 2014 when AMCON carried out its procurement activities “as they were under the notion that the scope of application of the Public Procurement Act (PPA) 2007 did not apply to them.
“The House is worried about the allegation of over N2 trillion losses in the non-transparent process adopted by AMCON in the sale of some banks, including Oceanic Bank, Intercontinental Bank, Enterprise Bank and Mainstreet Bank,” the report said.
The Corporation’s financial statement for the year ended 31st December 2014, showed accumulated losses of N4.269 trillion.
“In addition, the outstanding bad loans owed to AMCON by different companies and individuals (acquired from banks) as at 31st December, 2014 stood at N3.403 trillion which also has the potential of becoming outright losses.