The Senate has passed a bill that empowers the Asset Management Corporation of Nigeria (AMCON) to seize the assets of loan defaulters that were not included as collateral when the loan was approved.
The Bill, Asset Management Corporation of Nigeria Act, (Amendment Bill, 2021), was read for the third time and passed amid protest by some lawmakers, who pointed out a major controversial part of the legislation.
The bill seeks to empower AMCON to, amongst others, take possession, manage or sell all properties traced to debtors, whether or not such assets or property are used as security/collateral for obtaining the loan.
It also empowers the corporation to access the Special Tribunal established by a law, BOFIA 2020, for dealing with financial related matters.
The chairman of the Senate Committee on Banking, Insurance and other Financial Institutions, Uba Sani (APC, Kaduna Central), had just presented the panel’s report for consideration when some lawmakers noted that some of the clauses will empower AMCON to go beyond its mandate.
In his presentation, Mr Sani said stakeholders, in their submissions, pushed for AMCON to be empowered to take possession, manage, foreclose or sell, transfer or assign such properties adding that “this will provide for a quicker, easier and legitimate process of assets disposal.”
The Deputy Senate President, Ovie Omo-Agege, was the first to make the observation during the clause-by-clause consideration noting that if passed, some causes will empower the corporation to go beyond their mandate.
He sought to know the rationale behind the recommendation of the committee in clause two, which empowers AMCON to take possession of assets outside of those used as collateral in obtaining a loan request.
The clauses read: “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 essence of collateral, is that in the even of default, you lose that asset. What I am reading here is that in addition to seizing that asset, they (AMCON) want to go beyond that to every other asset or property that is traceable to the debtor. I think I need some clarifications to that,” Mr Omo-Agege said.
Other lawmakers noted that if AMCON goes beyond its mandate, it would degenerate into legal issues, as the corporation could go beyond what the customer tendered as of the time of taking the loan.
Albert Bassey (PDP, Akwa-Ibom North East) argued that “you cannot go outside the asset presented for the facility.”
But the Senate President who seemed uninterested in the observations raised by colleagues, said that was not the time to make corrections to the bill as it has already passed second reading – where the lawmakers would have made their observations and corrections.
Ignoring the complaints, he ruled in favour of the clause even when the voices against the clause overwhelmed those supporting it.
After the ruling, Mr Bassey who noted that AMCON is not the primary lender, raised ‘Point of Order (73)’ to challenge the decision of Mr Lawan.
Order 73 permits a senator to challenge the opinion of the senate president.
“Are you challenging the ruling that the ‘aye’ had it?…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,” Mr Lawan interjected.
“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,” he continued.
But a defiant Mr 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.”
“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,” was Mr Lawan’s response.
“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.
“Let the people go to court to test it, but our hope and desire is for AMCON to be able to recover huge sums of money – trillions that people have taken and now is on the head of Nigerians. And, it is criminal, really. People will consciously take money. I will advise that we stick to our decision,” he added.
Bala Ibn Na’Allah (APC, Kebbi South) and Opeyemi Bamidele (APC, Ekiti Central) advocated for the inclusion of a proviso in the AMCON amendment bill, to give it precedence over any other law that it conflicts with.
“We have to put a clause to say, ‘notwithstanding the provisions obtained in any other law to enable the law take effect,” Mr Na’Allah suggested.
Chukwuka Utazi kicked against the clause empowering AMCON to take possession of assets traced to debtors, explaining that, “most of the banks that have those bad debts colluded with the customers in doing that in the first place.”
Citing Senate rules, George Sekibo (PDP, Rivers East) observed that “it will be out of order to reconsider any specific question, upon which the Senate has come to a conclusion during the current session, except upon a substantive motion or decision.”
“All the discussion we are making on it now is of no value, they are not supposed to be recorded because we have come to a decision on it. It may be wrongly or rightly, but we have ended it,” he added.
The Senate President, thereafter, ruled against Mr Akpan, based on the provision of the Senate rule cited by Mr Sekibo.
Addressing journalists shortly after plenary, Adetokunbo Abiru (APC, Lagos), 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 payers’ money was used in 2009 to clear some of the debts by the federal government, which was not supposed to be.”
He said some loan defaulters still move freely without being 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.”