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AMCON CEO admits failure to recover debts from powerful politicians
- Owes CBN N3.6 trillion
The Managing Director and Chief Executive Officer of AMCON, Ahmed Kuru has admitted that the corporation has failed in its recent strategy to recover debts owed by some powerful Nigerians.
Kuru admitted that they had exhausted options in their current strategy as they have been finding it hard to recover debts from obligors it was set out to collect from.
“It is evident that we have exhausted the low hanging fruits and have to roll up our sleeves for a drawn out battle as it becomes harder to get obligors to settle their debts. This has hampered our business model and our third objective of obtaining the best achievable financial returns on assets acquired from the bank,” he said.
Speaking further, Kuru said it has become challenging for AMCON to fulfill its obligations as it had a funding shortfall of funding for the repayment of its loans in the past two years. “The ramifications for failure by AMCON to recover its debt, principally owed to the CBN, cannot be quantified as it goes beyond economic cost”.
AMCON which is yet to publish its audited financial statement for 2016 on its websites reported also admitted that AMCON has not been meeting its payment obligations to the Central Bank of Nigeria.
National Daily gathered that AMCON currently owes the Central Bank of Nigeria about N3.6 trillion, a debt it is likely to repay before its expiration date of 2020.
According to him, in the last two years, AMCON’s debt repayment to the CBN were N456.4 billion and N517.7 billion but actual payments were N256.7 billion and N191.1 billion in 2015 and 2016, respectively. This translates to a funding shortfall of N199.7 billion and N326.4 billion in 2015 and 2016, respectively.
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Meanwhile the body which is yet to publish its audited financial statement for 2016 on its websites reported that it made a loss of N254 billion in 2016 compared to N304.2 billion in 2015.
AMCON currently has a negative shareholding of about N3.9 trillion ballooned by its accumulated losses since inception of about N4.8 trillion.
AMCON’s interest income has also dropped from about N97.2billion in 2015 to N35.2 billion in 2016, Kuru’s first full year of operations.
In AMCON’s first full year of operations in 2011, the Corporation acquired N4.2 trillion Eligible Bank Assets (“EBAs”) from 22 Deposit Money Banks. Most of these loans have now been written down culminating in the accumulated losses of N4.8 trillion.
In establishing AMCON, the original intent was to takeover bad loans of banks, restructure with obligors on terms that would facilitate payment of the loans. However, most of its obligors who are some of the most powerful Nigerians in the corporate circle have failed to honour these debts leading to mounting interest payment and rising cost of maintaining AMCON.
The corporation spent about N64.7 billion in operating expenses in 2016 (N67.7 billion in 2015). These expenses including salaries amount to about N13 billion.