Nigeria’s government determination to recover over N5 trillion debt owed by about 350 individuals and corporations in the business space is taking a firmer hold. On Tuesday, the federal government announced in a statement, the forfeiture of Buba Galadima’s properties for the sum of N950 million he has owed since 2011.
The Assets Management Corporation of Nigeria (AMCON) saddled with the responsibility of debt recovery secured the court order to confiscate his properties. According to the statement issued by the presidency, it is a step that must be taken to salvage the financial sector from bad debts that are threatening to rock the economy.
But the obligor is in fierce opposition to the present government, prompting the presidency to explain the court’s judgment through the statement issued on Tuesday.
“A Federal High Court sitting in Abuja, Nigeria’s Federal Capital Territory in Suit No. FHC/ABJ/CS/1136/2019 has ordered AMCON to take over the business & assets of Bedko Nigeria Limited and Alhaji Buba Galadima—both parties owe AMCON nearly N900 million
“The loan was purchased during the first phase of Eligible Bank Assets purchase from Unity Bank Plc in 2011. Since then, AMCON has offered the obligor a good measure of olive branches and explored all avenues to resolve the matter amicably, but the obligor, and his company, Bedko Nigeria Limited have remained recalcitrant and unwilling to repay the huge debt to the Corporation.
“The order, which was granted to AMCON by Honourable Justice A.I. Chikere, the presiding judge gave the Government recovery agency the power to take over some properties belonging to the politician.
“The properties include House No. 15, Addis Ababa Crescent, Wuse Zone 4, Federal Capital Territory (FCT), Abuja and house No. 4, Bangui Street, Wuse 2 also in Abuja.
“Recall that aside the fact that the Federal Government set up the Inter-Agency Committee on the recovery of AMCON debt, President Buhari also signed the 2019 Amended AMCON Act into law.
“The amendment gives AMCON additional powers to go after all obligors of the Corporation no matter how highly placed in the society.
“Having taking over the properties, Jude Nwauzor, Head of Corporate Communications of AMCON said the Corporation will take all necessary actions, which includes asset take-over, liquidation, winding-up and garnishee proceedings against Bedko Nigeria Limited and its directors in line with the Court judgment and relevant sections of AMCON Act as amended.
“AMCON led by Mr Ahmed Kuru as Managing Director/Chief Executive has intensified efforts at recovering the over 5 Trillion Naira outstanding indebtedness to the Corporation.
“The AMCON CEO has repeatedly reiterated the fact that AMCON under his leadership will do whatever it takes within the law to recover the huge debt, and will not mind the status of the obligor in the discharge of the duties of AMCON.”
Buba Galadima, a fierce critic of president Buhari’s administration said the confiscation of his properties is against court ruling, and was motivated by his constant criticism of the present administration. But AMCON has applied the pattern of confiscation of assets since last year. In October 2019, the debt recovery corporation seized properties worth N263.73 billion from debtors, according to a report issued by the Central Bank of Nigeria.
AMCON was instituted in 2010 by the federal government to buy bad debts from banks and save the financial sector from crumbling.
Since 2010, the journey to recover non-performing debts has kept hitting one hurdle after the other, mainly because most of the people in debt are prominent Nigerians who know their way around.
In September 2019, the federal government set up an interagency committee presided by the vice president, Prof. Yomi Osinbajo. The committee was tasked with the responsibility of finding a workable solution to the recovery of accumulated N5 trillion debt.
“One of the terms of reference is for the committee to prepare a report, giving us a sense of what the timelines will be. About 67% of the outstanding N5 trillion debt is said to be owed by just 20 individuals/entities,” Osinbajo said upon the inauguration of the committee.
In August 2019, Buhari had signed into law the Asset Management Corporation of Nigeria (Amendment) (no 2) into law. The amended Act gave more powers to AMCON to enforce debt recovery using many means legally possible, including sequestration of properties used as collateral.
It also empowers the debt recovery commission to place any bank account or any other account comparable to a bank account of a debtor of an eligible financial institution under surveillance. The bank’s customer’s privacy rights were overruled as banks were mandated to make a disclosure of financial information of debtors under watch.
It’s upon this establishment that AMCON geared on to the quest of debt recovery. Although the confiscation of Buba Galadima’s properties appears political because he is a critic of the government, and there are others owing more than him, many see a commission doing its job.
However, the question people are asking is: will other big fish in the debt register see the same treatment?