Asset Management Bill Ready for President’s Assent
Asset Management Bill Ready for President’s Assent
Posted By: On: 05 Jun 2010 8:32 PM
•House adopts amended constitution, reshuffles committees
The Asset Management Corporation of Nigeria (AMCON) Bill, which proposes a company to buy the toxic assets of some ailing commercial banks in the country, is ready for President Goodluck Jonathan’s assent as the House of Representatives yesterday passed the harmonized version of the bill.
And a day after the Senate performed a similar ritual; the House also voted and adopted the harmonised report on the amendment of the 1999 Constitution.
In a historic exercise that had 255 lawmakers participating, 250 of them voted in favour of the bid to amend the constitution; two lawmakers voted against it while three others abstained from voting.
Part of the amendments approved includes the one on clearing the issue of succession when the President is away on leave or holiday, making it mandatory for the President to transfer power to his deputy.
The amendment drinks from the experience of the country when the late President Umaru Musa Yar’Adua went on medical trip abroad for several months without transferring power to his deputy.
The harmonised version of the amended constitution will now be transmitted to the 36 state Houses of Assembly for ratification.
Chairman House Commit-tee on Banking and Currency Hon Ogbuefi Ozomgbachi who laid the report before the House recalled that the AMCON Bill 2010 was passed by the House on Tuesday March 23, 2010 and transmitted to the Senate for concurrence.
The Senate, he said, passed the bill with some differences, which necessitated a joint conference of the two chambers on Tuesday May 18, 2010 where a harmonized version of the legislation was adopted.
CBN had lobbied for the establishment of the company to buy up non-performing loans in exchange for government bonds in order to free up banks' balance sheets.
The proposed law was presented to the National Assembly as an executive bill on the heels of the distress in the banking sector and the N620 billion bailout intervention by the CBN.
The capital of many of the banks had been eroded by bad loans that exceeded N2 trillion, which resulted in heavy provisioning in excess of N1.5 trillion by the last quarter of last year.
The rescued banks whose managements were removed and new ones appointed last year by the banking watchdog are Bank PHB Plc, Spring Bank Plc, Equitorial Trust Bank, Intercontinental Bank Plc, FinBank Plc, Afribank Plc and Oceanic International Bank Plc, Union Bank of Nigeria Plc.
The buy-over of the bad assets of the banks will not only permit them to resume lending but will clean up their books for fresh investors to participate in the recapitalisation process.
The specific objects of AMCON, according to the Bill, would, among others, be to “assist eligible financial institutions to efficiently dispose of eligible bank assets in accordance with the provisions of this Act; efficiently manage and dispose of eligible bank assets acquired by the corporation in accordance with the provisions of this Act; and, obtain the best available financial returns on eligible bank assets or other assets acquired by it in pursuance of the provisions of this Act (having regard to the need to protect or otherwise enhance the long-term economic value of those assets, among others).”
AMCON is expected to offer a window through which the banks can discount voluntarily any non-performing loan that is above 10 per cent of their total share capital.
Meanwhile, the House has reshuffled the leadership of some of its committees, dropping one chairman and three deputy chairmen in the process.
In what has been interpreted to be an onslaught against perceived enemies, Speaker Dimeji Bankole sacked the Chairman, House Committee on Inter-Party Relations, Hon. Gbenga Oduwaiye.
He also dropped the Deputy Chairman, House Committee on Housing, Hon. Kayode Amusan and Hon. Gbenga Onigbogi who was until yesterday Deputy Chairman, House Committee on Ministry of Niger Delta.
Hon. Asita from Rivers State was also dropped from his position as Deputy Chairman, House Committee on Anti-Corruption.
All the officials dropped in the cabinet reshuffle are friends of the embattled lawmaker and Bankolé s arch-rival, Hon. Independence Ogunewe and were fingered among those who made an issue out of the the N2.3 billion car purchase scandal that nearly sacked Bankole.
On the other hand, Patrick Ikhariale and Onyema Chukwuka have been assigned the chairmanship of the House Committees on Power and Works respectively.
Chairman, House Committee on Capital market, Hon Ahmed Wadada has been moved to House Committee on Information; Hon. Yakubu Dogara has been moved from the House Committee on Customs to the House Services Committee while Hon. Mohammed Almakura who was Chairman of House Services Committee has been moved to the Committee on Urban and Housing Development.
Other changes include the takeover of the House Committee on Cooperation and Integration in Africa by Hon. Chinedu Eluemuno; Hon. Kadijat Buka Ibrahim has replaced late Honourable Njidda Gella as Chairman House Committee on Privatization while Hon Umaru Farouk will take over the House Committee on Customs.
Bankole said more changes should be expected in due course even as the House formally adjourned for a two-week recess marking the end of the legislative year.
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