Litigation, Insights

An Appraisal of the Asset Management Corporation of Nigeria (Amcon) Act, 2010

The AMCON Bill was signed into law on the 9th day of July, 2010 as an Act to establish the Asset Management Corporation of Nigeria for the purpose of efficiently resolving the non-performing loan assets of Banks in Nigeria and for related matters.

President Goodluck Jonathan in a brief speech delivered after the signing ceremony declared that AMCON would “help to stimulate the recovery of the financial system from the recent crisis by boosting the liquidity of troubled banks through buying their non-performing loans, helping in the recapitalization of banks in which the CBN was forced to intervene, and increase access to restructuring/ refinancing opportunities for borrowers”.

It would be recalled that as at the end of November, 2009, CBN Governor Sanusi Lamido Sanusi had sacked the chief executive officers and directors of eight of the Nation’s 25 banks for allegedly imperilling the financial health of their organizations. Sanusi had also disclosed that at the time, the rescued banks had an aggregate toxic assets’ portfolio in excess of N2Trillion. The act of the CBN Governor was perceived by many as an interventionist manovre to stem the haemorrhage that rocked the banking sector then. The AMCON Act could therefore be seen as a child born out of circumstance to ensure the affected banks remained a going concern. This write-up seeks to do an appraisal of the AMCON Act, with an examination of some of the salient provisions of the Act and ancillary issues.

The AMCON 2010 Act:

The Act contains a total of 62 sections, divided into 8 parts
Section 1 (1) of the Act establishes the Corporation.
Section 1(2) and (3) provide that the Corporation shall be a body corporate with a common seal, perpetual succession and may sue and be sued in its corporate name. The Corporation may acquire, hold and dispose of movable and immovable property for the purpose of its functions and objects.
Section 1 (4) provides for the independence of the Corporation in the discharge of its duties.
The Authorized share capital of the Corporation as provided in Section 2(1) shall be 10 Billion Naira, which shall be fully subscribed to by the Federal Government and held in trust by the Central Bank of Nigeria and the Ministry of Finance incorporated in equal proportion of fifty percent each.

OBJECTIVES OF THE CORPORATION.
The objects of the Corporation are:
a)To assist eligible financial institutions to efficiently dispose of eligible bank assets in accordance with the provisions of the Act.
b)To efficiently manage and dispose of eligible bank assets acquired by the Corporation in accordance with the provisions of the Act.
c)To obtain best achievable financial returns on eligible bank assets or other assets acquired by it in pursuance of the provisions of the Act…

 

 

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