The Asset Management Corporation of Nigeria (AMCON) will go after the foreign assets of debtors with tainted loan agreements, the Managing Director/CEO, Mustapha Chike Obi, has said.

Chike Obi, who spoke yesterday at the launch of the AMCON Road Show, in Abuja, admitted that some of the loans were executed by the bank, which connived with borrowers, leading to tainted assets. This, he said, compelled AMCON to ask banks to state which of their loans are insider related, tainted or where assets of borrowers cannot pay the loan.

AMCON, he said, "has extensive legal backing to go after assets abroad, whether the asset is captured in the loan agreement or not and will declare some borrowers insolvent before going after them."

He said AMCON is about appointing debt recovery agents across the country to recover the pending loans, as it has "another one and a half to two years to recover the debts."

He stated that the agency is grappling with "dimensional borrowers" as a result of their spread in different states in the country, adding that AMCON has generated a database of debt recovery agents and lawyers to pursue different borrowers across the country.

Mr. Chike Obi also disclosed that AMCON had nothing to do with the two recently licensed non-interest banks.

On the fate of the three nationalised banks, he said the corporation is now in the process of evaluating what the entities are worth, adding that AMCON has so far received 44 Expressions of Interest (EoI), but has shortlisted 11 entries that would soon get Requests for Proposals (RFPs). He said in another 46 weeks, AMCON will appoint/select the advisor for the nationalised banks."

He said the affected banks were losing between N2 billion - N3 billion monthly before their take over, adding that currently, "they are running as profitable institutions. The banking industry sinking fund of 30 per cent basis point will fund the loses of selling the distressed banks."

AMCON, as the largest user of the capital market, Chike Obi, explained, cares about what happens at the market and would support the capital market in any way it can. This he explained, is because AMCON is the largest domestic issuer of bonds, with assets of about N5 trillion, thus making it the largest financial institution in the country.

He said the corporation is expected to reach its maximum size, sometime this year and decline as time goes on because of its 10 year life span. Consequently, he added that the corporation"will not engage in wastages."

In her presentation, an Executive Director of the corporation, Mrs. Foluke Dosumu, said N1.3 trillion was spent to bail out the five distressed banks- Oceanic Bank, Intercontinental Bank, Fin Bank, Union Bank while Bank PHB, Afribank and Spring Bank were nationalised.

She said the loans will not be written off, as AMCON intends to recover them. But she stated the cost of the bailout "will be borne by the banking industry and not the tax paying Nigerian public who will never be called upon to pay for bank bailouts. AMCON is trying to be transparent in its operations and it will not dispose off assets in secret but openly," she added.

Culled from thenationonlineng