By Jonathan Owobu
There is no doubt that those who proffered the concept of Asset Management Corporation of Nigeria (AMCON), had a noble vision of not only stabilizing the financial sector but also the economy in general. Hence, the institution was created to be a key stabilizing and revitalizing tool aimed at reviving the financial system by efficiently resolving the non-performing loan assets of the banks in the country.
The emphasis here is on non-performing loan assets. But as usual with many Nigerian institutions left in the hands of the bureaucratic authorities, the tendency to victimize perceived enemies or those who insist on things the right way is not absent.
The case between Suru Worldwide Nigeria Limited, owned Mr. Edward Akinlade, and AMCON seems to have been a victim of the ‘pull him down syndrome,’ in the country. This is happening at the detriment of the national economy.
Recent reports indicate that Mr. Akinlade is not alone in this kind of situation as numerous reports continue to surface everyday of AMCON vehemently disobeying court orders to close down companies in the name of indebtedness.
What immediately comes to mind when one reads such stories is ‘why is it impossible for AMCON to deploy other methods such as takeover such firms, employ receiver managers to run the firms, recoup the debt in question and handover the entity back to the owner.’ The question is why throw away the baby with the bath water? Why not save the company in order to at least, save the jobs of those engaged by such firms rather than send them back into the labour market at a time hundreds of millions of Nigerians are unemployed? Did AMCON consider the multiplier effect of closing down a company in an economy like ours at a time when government is striving to create a conducive environment for the private sector? Is AMCON against President Buhari’s government?
Indeed, I challenge, the Buhari-led administration to investigate AMCON, let a forensic audit of its operations be carried out to determine its benefit or otherwise to the nation’s economic development. Let the management of AMCON tell Nigerians how many companies, properties they have seized since it came into existence and what has become their fate. Has AMCON become another channel for self enrichment? How does its actions of disobeying court orders, seizing companies and allowing same to die better the financial sector in particular and the national economy in general? How does the culture of seizures attract foreign investors or local entrepreneurs?
Don’t misunderstand me, one is not making case or excuses for some dubious entrepreneurs who collect loans from the banks and divert some to none-product ventures. No, I am talking of genuine investors who obtained facilities from the banks and actually engaged in the ventures for which such loans were deployed, but are having some challenges either due to the micro economic environment. Is the best decision to kill such or give them a helping hand to survive?
What about a situation where such loans are performing but the banks involved choose to sell same to AMCON for undisclosed reasons? Does AMCON Act allow it to buy performing loans? Is the Corporation not suppose to be a rallying point for resolving the issues of bad loans with a view to ensuring that debtors meet their obligations. And in so doing, encourage entrepreneurs to expand their operations to bring about increased employment rather than take pleasure in suffocating the existing ones.
The case of Suru Worldwide Nigeria Limited, is one that should be a source of concern to those with oversight functions over AMCON.
According to available information in the public domain, Mr. Edward Akinlade, the founder and Group Managing Director of Suru Worldwide Nigeria Limited, a Chartered Accountant both in Nigeria and in the United Kingdom, runs a chain of businesses ranging from real estate to hospitality among others. In 2006, the company obtained a loan of Thirteen point Five Billion Naira (N13.5) from Oceanic Bank now ECO Bank. As of 2010, the company had a drawdown of Ten Billion Naira (N10b) with an outstanding balance of three point Five Billion Naira (N3.5b) when Oceanic Bank was acquired by ECO Bank.
Problem started when the management of ECO Bank wrote to the company, alleging that it has no money to continue to fund the facility and has subsequently sold the loan to AMCON.
Investigations revealed that transaction between ECO Bank and AMCON, which can best be described as surreptitious was carried out even though the loan was performing and without the consent of the debtors.
The facility did not qualify to be taken over by AMCON since it was a performing loan. Besides, the loan which amounted to about Ten Billion Naira (N10b), was presented and sold to AMCON for about Fifteen Billion Naira (N15b) face value with AMCON Purchase payment of about Eight Billion Naira (N8b).
To forestall what the company saw as, “an illegal act” by Oceanic Bank, now Ecobank selling a 2010 performing loan to AMCON is against the AMCON Act 2010.
The company instituted a case at the Federal High Court Lagos, suit no: FHC/ L/ CS/ 450/ 11: BETWEEN SURU WORLDWIDE VENTURE NIGERIA LIMITED V. ECO BANK PLC & AMCON.
Further investigations showed that in spite of the case in court, the management of the company engaged AMCON for settlement and they both agreed to a settlement sum of Six point Three Billion (N6.3b) from AMCON in 2015 since it had earlier paid AMCON over N2.4b before 2012. But AMCON staff have worked to frustrate the effort by even going ahead to block the company from having access to foreign loan.
In addition, AMCON instituted three litigations against the firm in an attempt to close down its hotels. In all three suits, AMCON’s claimes were dismissed.
Seizure Of Property Despite Pending Court Cases
Despite, the courts’ refusal to grants AMCON’s request, the Corporation’s management under under the leadership of Mr Ahmed Kuru, on September 22, 2017, with the aid of over 40 strong MOPOL/SARS Police men invaded Best Western Hotel, located at 12, Allen Avenue Ikeja Lagos, a 5 star hotel belonging to Suru Worldwide Limited.
In the process of invading the hotel, guests, both local and foreign, numbering over 500, were harassed.
Similarly, about 1,257 workers lost their jobs.
The hotel owner, it was gathered, Mr. Akinlade, was not exempted from the horrible experience as he was harassed, making him to sustain injuries on his leg and face. He was rushed to the hospital and admitted on the same day at the Lagos State University Teaching Hospital, lkej.
According to a former management staff of the hotel, James Oliver, the invasion followed five days of attacks and intimidation by men of the Nigeria police force at the hotel.
Hotel Valuation Dwells Following Invasion
Interestingly, the hotel at the time of taking over by AMCON was valued for about Six Billion (N6b). As part of efforts to salvage the livelihood of the hotel staff and vendors, Suru Worldwide offered to be the manager of the hotel, with proceeds payable to AMCON pending the determination of all suits. But AMCON refused and shut down the hotel.
Unfortunately, because the facility is not in use, today, the asset’s valuation has depreciated to One Billion Naira (Nlb) from N6billion.
Fresh Efforts To Cripple My Business
While the dust is yet to settle, Mr. Akinlade was said to have been issued a letter dated September 2, 2020, from AMCON addressed to him, announcing the sale of another property without his consent.
In a petition to the Lagos #EndSARS tribunal, which was obtained, Mr. Akinlade said: “Our property, situated at No. 12, Reverend Ogunbiyi, G.R.A. lkeja, Lagos, subject matter of Suit NofHC/L/CS/1059/2016, now on appeal to the Supreme Court, at AMCON instance, has been purportedly sold.
“AMCON however failed to disclose the amount for which it was sold and who the purported buyer is, thereby leaving me to conjecture. This situation no doubt, speaks volume, about this purported sale transaction. ”
AMCON Snubs National Assembly’s Invite
Worried by the speed at which AMCON has continued to seize his properties, Mr. Akinlade was forced to petition the National Assembly to seek protection and settlement. The matter which is now before the House of Representatives Committee on Public Petitions, appears to be facing the same fate as AMCON has refused to honour invitation.
“Twice the House Committee has invited us. Twice AMCON has failed to appear, offering one form of excuse or the other. However, I know that it is an attempt to frustrate the hearing but I will not give up.
“My worry is, that when an agency created by an Act of parliament begins to snub the institution that birthed it then there is cause for alarm as the country may be heading for a state of anarchy,” he said.
He, however, assured that he is committed to getting justice, adding that he will not allow his company to suffer the fate of many other innocent ones, whose life has been terminated due to what he called, criminal attempt by AMCON and of its collaborators to frustrate genuine entrepreneurs.
The question consistently bothering the enlightened minds is, ‘Why would AMCON sit on a legal business as well as threatening profitable and viable establishment like Suru Worldwide Limited?
There is no gain saying that federal government and necessary authorities should wade into the crisis to save the economy.
Owobu, an economist, writes from Abuja