Senate Empowers AMCON To Seize Assets not Captured in Collateral

NASS Correspondent

The Senate has empowered the Asset Management Corporation of Nigeria (AMCON) to seize customers’ assets not captured in the collateral during acquisition of loan by borrowers.

The Bill, Asset Management Corporation of Nigeria Act, No. 2 2019 (Amendment Bill, 2021), was, however, passed amid protest by some lawmakers, who observed some discrepancies in the Bill.

Considering the report on the Bill by the Committee on Banking, Insurance and other Financial Institutions, presented by its Chairman, Sen. Uba Sani (Kaduna Central), some lawmakers noted that some of the clauses will empower AMCON to go beyond its mandate.

The Deputy President of the Senate, Ovie Omo-Agege, who made this observation, drew the attention of the President of the Senate, Ahmad Lawan, to the clauses, noting that if passed would empower the corporation to go beyond their mandate.

Other lawmakers noted that, if AMCON goes beyond its mandate, it would degenerate into legal issues, as the corporation would go beyond what the customer tendered as at the time of taking the loan.

The Senate President also said that this is not the time to make correction as the Bill has already passed second reading, where the lawmakers would have made their observation and correction.

The clauses in question reads: “Section 34 of the principal Act is amended by substituting for the existing subsections (1)(a) and (1)(b) with new subsections (1)(a) and (1)(b) as follow;

“(1)(a) subject to paragraphs (c),(I) and (d), become vested with and acquire legal title to the eligibility bank assets and all assets or property tangible or intangible belonging to, traced to and in which the debtor has interest in, whether or not such assets, and corporation shall be vested with power, to the exclusion of all other creditors, to take possession of, manage, foreclose or sell, transfer, assign or otherwise dispose of the eligible bank asset and any tangible or intangible asset or property is used as security for the eligible bank asset, in full or partial satisfaction of the debt owed to the corporation by reason of the acquisition of the eligible bank asset notwithstanding that the interest of the debtor in such asset or property is equitable only.

“(1)(b) Any certification of sale or certificate of transfer of title executed by the Corporation in exercise of its powers under subsection (1)(a) above shall constitute a valid registration instrument under all applicable land registration laws applicable in the Federation and in all Land and Corporate Registries in the Federation.”

The observation by the lawmakers didn’t deter the President of the Senate from ruling in favour of the clause, even when the voices against the clause overwhelmed those supporting it.

After ruling in favour of the Clauses, Senator Akpan Bassey, who noted that AMCON is not the primary lender, raised a point of order 73 to challenge the decision of Lawan, which degenerated into the following altercations.

Lawan said: “Are you challenging the ruling that the ‘yes’ had it? If that was your opinion, but in my judgment and understanding and the only one that has the gavel, I will view that…. we should be very magnanimous when we do the exercise. This is something majority of our colleagues have voted for, let’s allow this thing to be implemented, if there’s any difficulty then come back, it can be challenged.”

Bassey said: “This is subject to a challenge in a court of law because if I’m a debtor, and tendered a commercial…… I have signed everything, you cannot go beyond the context of that clause, you can’t, it will be challenged.”

Lawan further said: “Thank you very much Bassey, when it’s time to legislate, we all come here with a very clear mind, that we are doing this for our country. We don’t have any interest but national interest, when majority of our colleagues here in their judgement feel this is the right thing to do.

“Let me say that even if it’s the wrong view, it’s still the majority. Unless we have any cause to reverse ourselves. But if majority of the senators thinks this is what should be done to remedy a situation that requires our attention, I think we should allow it.

“It’s our hope and desire that AMCON is able to recover huge sums of money that people have taken that is now on the shoulders of Nigerians. What’s happening is criminal, people consciously take money….. I will advise we stick with our decision, let the court make their judgment if someone goes to court.”

Addressing newsmen shortly after the plenary, Senator Adetokunbo Abiru, said, “the issue has to do with AMCON going beyond the collateral by extending its ability to recover debt.

“The collateral presented during the loan contract shouldn’t be the only source of payment available from the borrower.

“Tax payer money was used in 2009 to clear some of the debts by the federal government, which was not suppose to be.

He, however, noted that some borrowers, who have defaulted still move freely and live large without been prosecuted.

According to him, “AMCOM will go the extra mile to recover loans. They will trace you and your other monies hidden elsewhere till you pay your debts.”