Cover Box, Featured

 

·       How Peugeot France want to kill Peugeot Nigeria

·       Why AMCON will Seize More Companies by December

·        What AMCON will do to 200 Politically Exposed Debtors

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  AHMED Lawan Kuru, managing director, Asset Management Corporation of Nigeria, AMCON, an astute banker, is also a sharp shooter who leaves no one in doubt that he means business as he goes about his onerous duty of debt recovery from recalcitrant obligors. Toughened by his 30-year experience in the banking citadel, where he horned his skill in risk management, Kuru goes about the “unpleasant” job of debt collection with panache.

  Holding court with obligors, showing understanding where there is need to and working with the fear of God not man, the AMCON managing director recently read a riot act to about 5000 obligors (of which 350 hold about 80 per cent of N5trillion debt owed the corporation) currently hibernating. Read his lips: “There is no hiding place for obligors” because Kuru and his eagle-eyed team are determined to dig them out from their nooks and crannies before the lifespan of AMCON expires. Hence his advice: “Do not go into hiding; come discuss with us”. Failure to heed this advice will apparently bring the full weight of the law on the obligors.

  Kuru’s principled disposition to debtors started years back when he variously served as the chief executive officer of Enterprise Bank Limited by August 2011; executive director of Keystone Bank Limited; executive director of North Bank, West, Central and East Africa of Keystone Bank Limited and director of Express Discount Limited and Orient Bank Limited. Kuru, who started his banking career with Habib Bank in 1985 before its nationalization, worked as an executive director at Bank PHB Plc, overseeing critical areas like, risk management, compliance, commercial banking, Northern operations, public sector, multilateral agencies and the West Coast, East and Central Africa expansion programme of the bank.

  He also worked as a budget analyst with the Federal Ministry of Finance in 1984, and as an executive vice chairman, Emeritus Capital Limited, a financial services firm with specialty in international business development focusing in sub-Saharan Africa.

  He was appointed to his current position by President Muhammadu Buhari on August 18, 2015, following the dissolution of the pioneer executive management team of AMCON. He holds a Bachelor of Science and Masters Degrees in Business Administration from the Ahmadu Bello University, ABU, Zaria. He is an alumni of the Chartered Institute of Bankers, Lagos Business School and London Business School. Kuru, who spared time out of his busy schedule recently to grant interview to Maureen Chigbo, editor, Realnews, in his office in Abuja, dwelt on the fate of obligors; the challenges of his job where he makes an average of three enemies per day; why Peugeot France must not be allowed to dump Peugeot Automobile of Nigeria for another company in Nigeria after 45 years and those who influenced his life. Excerpts

  

  Realnews: Recent statistics from AMCON said 350 obligors owe about N5 trillion debt to the corporation. How is it that in a country of about 200 million people only 350 people owed such a whopping amount?

  Kuru: It is not surprising to the extent that less than 100 people own more than 40 per cent of the wealth of the world. It is not totally unexpected because most of the major credits are given to big companies and usually when businesses go bad those loans are sold to Asset Management Corporation. So, we have more than 14000 loans of which 350 account for 50 per cent because of quantum and you discover that those big businesses were worse hit by the global economic crisis in addition to the fact that some of those credits were either not properly structured or were obtained in the first instance without any intention of repayment.

  Realnews: Were there collaterals given by these businesses before the loans were granted?

  Kuru: There are quite a lot of cases where the collaterals could not quite cover the exposure. But what people do is that they use the business as collateral for the loan so if the business is challenged, the collateral cover is also affected. Sometimes, you take a loan to finance a venture and the proceeds of that venture is diverted to other businesses. If the main venture suffers and you go after the collateral, you find that it did not cover 50 per cent of the original loan. Meanwhile, the debtor would have already used the cash flow from this main business to set up other subsidiaries that was not supported by the original business with the collateral. That is why the AMCON Act provides that once you have taking a loan regardless of whatever collateral tied to it, we can go after any other business or property that bears your name and those of other directors to recover the loan if it goes bad. For instance, if you have appointed anybody now as Realnews director and you go and borrow money and the loan goes bad, we will go after that director, go after his house because he has the responsibility to ensure that the business is managed well since you complied with the terms of the loan. If he doesn’t do that he will answer to it. That is the law. It has nothing to do with us.

  Realnews:   For those who are not properly school, collaterals are supposed to cover loan…

  Kuru: It does. Let me give you an example.  You take a loan of N10 billion to set up a business. At the point of setting up the business the collateral value is 150 per cent of the loan. Along the line the business suffers. When the valuation is done, it shows that the state of the collateral has depreciated from 150 per cent to 120 per cent, then to 100 per cent. With the passage of time, it will reach a time when the collateral will not be worth 50 per cent of the loan. Meanwhile, the loan to be paid goes up because it has accumulated interest while the collateral is going bad. In the case where the business serves as collateral, if it is doing well, the collateral will go up but it will go down if it is not doing well. So the valuation goes down and the interest goes up. From 150 per cent it goes down to 50 per cent and then 40 per cent and so on. If you are talking about landed property may be inflation will help the valuation of the collateral.

  Realnews: Does it mean that the collaterals for the 14,000 debts did not measure up?

  Kuru:  My total obligation as at today is around N5.4 trillion. But if I sell the collateral I have today I can hardly get N1.6 trillion. So there is a gap.

  Realnews: Huge gap. So it means that over time the collateral loses value?

  Kuru: If you go and take a loan and you give your car as collateral. Will the valuation of the car not go down over time? It depreciates. If you give a brand new factory, brand new machinery as collateral, are you saying they will be the same after five years? It will go down, isn’t it?

  Realnews: We talked about PAN at your last media briefing. What is the situation of PAN now? I heard that they are establishing a new plant in the country.

  Kuru: You see this kind of thing can only happen in Nigeria. This guys came to partner with the Nigerian government to start Peugeot company and managed it for more than 35 years. Because the business was challenged, it was sold under the privatization by the BPE. Now the technical partners have not supported the work of this company effectively. In Iran, where they started this business after they began in Nigeria, they have achieved 100 per cent local content. Now these guys could not achieve anything here and because it is now convenient, they are abandoning a partner of more than 40 years to get another partner and you are leaving this old one in the lurch without considering all the investments they have made all these years. And you now want to start afresh with another partner leaving behind all the liabilities you incurred in the old company as if it is not your business. This should not be allowed. How can you run a partnership with government on one arm and then suddenly in the middle of the road you abandoned it because there is a problem. The company is now with AMCON, you abandon it to start afresh with another partner to take advantage of the situation. If there is a problem you solve it with the existing partner. I don’t have any problem with partnerships. It is good for the country. It is good for the Kaduna State government and the new partner. But certainly, it should not abandon an existing partner to go and find another one when issues concerning the old partner, which deals with your product have not been resolved. The company is dealing with only Peugeot cars not with Toyota or any other brand and then you are leaving it to set up a new plant entirely. So who will take the loss – the government unfortunately. Government should not allow this. Somebody should ask what is happening. The PAN representative has no shame in even celebrating the new partnership. Somebody should be ashamed that they have not been able to deal with this mono-product partnership and then you are shifting; taking away the franchise from somebody who had it for more than 40 years and giving it to another partner.

  Realnews:  If they take away the franchise, the old partner will not be producing Peugeot cars again?

  Kuru:  It cannot deal with Peugeot cars anymore and can’t assemble the cars in the country despite all the investments they have made in the last 40 years and will have to go and look for other partners. Where is such done? It is not done.

  Realnews: Has government waded into the Peugeot case?

  Kuru:  Somebody should ask them what has happened in this your relationship. What value have you added in the last 40 years in this business. What local content have you done in this business? Why are you getting a new partner? Why are you abandoning this business? Somebody should ask these questions.

  Realnews: Is government not aware of this?

  Kuru: I don’t know but I know that somebody needs to ask these questions.

  Realnews: You mean the ministry of industry?

  Kuru:  Even the press, somebody should ask these questions. The ministry of trade and industry or the Nigeria Automobile Agency that deals with setting up of new assembly plant need to ask these questions and somebody needs to answer because it hurts the business, it hurts the industry, it hurts the country.

  Realnews: AMCON is in charge of PAN assets now. Can’t it take pro-active action to ensure the new company doesn’t take off?

  

  Kuru: You know in Nigeria you just have to be very careful how you pursue things because sometimes people will misconstrue your action. I believe that if a company is existing in Nigeria for more than 40 years with a partner which is government related and the come up and say they want to change the partnership somebody should ask question before I give you approval for the new partnership what has happened to the old partnership. It is something that you can sit down and talk about. You can’t abandon an investment of more than 40 years to go and set up another plant to produce the same vehicle; the same partnership in the same location. So what happens to the investments already made?

  Realnews: Can PAN go to court to sue to stop the new partnership?

  Kuru: We are actually looking at that. You see, there is the issue of franchise which could be for two, three or four years. But there is also issue of fair play in business which PAN France does not take into consideration in this matter about a business it managed for more than 40 years without achieving at least 4 per cent or 3 per cent local content?

  Realnews: Could they be hiding under the franchise agreement to break free from the old company?

  Kuru: I don’t think they are hiding. They could have at least put the issues on the table and discuss with the government. If today I am forced to take the loss, it is government losing.

  Realnews: How much is the loss?

  Kuru: The investment in PAN cannot be less than N35 billion in terms of loan and equity. With their new bid for another partnership, I need to know why today I am selling Peugeot cars and tomorrow I will not be able to sell it when all my business plans, strategy, plant, tools are designed for Peugeot cars.

  Realnews: If they succeed with a new partnership, it will kill off the old company?

  Kuru: Automatically and these will affect all the employment already created.

  Realnews: How many people are employed by PAN?

  Kuru: Directly or indirectly, it cannot be less than 3000 people. Because you are talking about the plant, distributors, the workshops spread all over Nigeria. What they should have done is to hold discussion with the old company on the way forward not starting a new partnership.

  Realnews: AMCON by July 19, should be eight years. What has been the achievements of AMCON in these past years?

  Kuru: In the eight years, we have recovered more than 45 per cent of the DBA (Debenture Purchase Assets). And by global standard that is commendable particularly when you look at the way the loan is structured. Number two, without AMCON may be some banks would have gone under and some depositors lost their money and some businesses that AMCON supported in the past would not have been there. Without AMCON may be some staff in the banks would have lost their job. So the intervention was not unique to AMCON. It is a global model that was applied here. And we have been able to take away the headache from the financial institutions and then now managing it.

  Realnews:  You talked about 5000 obligors that have gone into hiding. What is the situation now?

  Kuru: We have been chasing them all over the place. We have changed our strategy from a typical straight forward resolution to recovery. As I said before, we sit down and talk about payment plan and how the cash flow of the business can support loan repayment but we have realized that is not possible. The whole essence is if you cannot pay the loan we will have to dispose the assets supporting the loan. Now after almost seven years plus if you don’t go after the assets, they are also depreciating by the day which makes it very difficult for us to be able to achieve much in terms of assets realization. So it is in our interest to aggressively go after the assets, seize them and then dispose them within the confines of the law as provided by the AMCON Act.

  Realnews: Recently, you presented the financials of AMCON. In 2016, you recorded a loss of N350million. What is the situation this year?

  Kuru: The loss has reduced substantially. If we go at the rate we are going currently, by next year we are going to be in the positive. I won’t call it profit because AMCON was not set up to make profit. You can say you are not profitable when you have huge gap in terms of meeting your obligation. How do we become positive? By aggressive recovery because if you don’t recover, the interest on the bond continues to go up. But if you recover, you reduce your bond obligations, which means you will reduce your interest obligations which improves your financials. So with the strategy we are putting in place I hope that by next year we will be in positive situation by the rate we are going at aggressive disposal of assets.

  Realnews: Did you adopt this aggressive recovery and disposal approach because you have just five years to the end of the lifespan of AMCON?

  Kuru: Yes, because we have come to realize that we are not going to be here forever and the longer we stay they more costly it is for us. If I seize an asset today and I don’t dispose of it my interest and my bond will continue to rise because it is still reflecting in my books. And we realize that with the closure of AMCON approaching we need to change our strategy. At the initial stage, you can sit down with an obligor and you agree a repayment period of say three, five or six or eight years. Now you don’t have that eight years to give them anymore. All those that we have gone into the repayment plan have not been followed. What it tells you is that even that approach does not work. So the only approach that can work is what the Act, what the law provides – seize the assets and sell; some businesses are unredeemable to new investors with more capital and new ideas because anybody buying your assets is not interested in assets stripping. That is what we have done and what we are working on now.

  Realnews: But we have seen some cases of assets stripping like the Daily Times

  Kuru: Who did the asset stripping?

  Realnews: The person who bought it.

  

  Kuru: But you know we are not BPE. We are not involved with what people bought from BPE. However, before any loan, asset will come to AMCON, it means it is already bad. If it is good it will not come to AMCON. It is in AMCON because the assets have been stripped before. I am not talking about any particular one. Once it is in AMCON, our own is to take the business and sell. We are not in interested in selling just the air conditioners or furniture. Of course, if I am selling an asset and find somebody who says he is only interested in the furniture I will sell the furniture. Isn’t it? But I don’t do asset stripping I do asset disposal. There are people who specialize in buying companies to strip their assets. They are not interested in the business. We are interested in selling companies to people who will add new money, bring investments to grow the company.

  Realnews: You made high profile seizures involving prominent Nigerians and politicians. Did you discuss with them before taking over their companies?

  Kuru:  You know, before AMCON can take over your company there must have been discussion for minimum of five years. The most difficult thing is to start the legal process. Before AMCON takes anybody to court there must have been minimum of five years discussion. AMCON has been in existence for more than seven years and some of these assets are just being taken last year. I heard some of them saying they don’t know about the law. But if you have an obligation you should fulfill that obligation. So once you see AMCON taking over assets, it must have exhausted all civilized approach before concluding with getting court order to seize assets and you will see more as we approach the end of the year. There are quite a lot.

  Realnews: Can you give us the list of the companies?

  Kuru: We try not to celebrate anyone’s misery because some people are in this difficult situation not because they want to be there but because the environment has affected their businesses. But the AMCON Act does not recognize that. So we have to take over. We try not to celebrate anybody’s misery.

  Realnews: By August 18, you will be three years in office. By the time you conclude your tenure what would like to be remembered?

  Kuru: I want to be remembered as some who came, saw an institution that has been set up properly and improved on it; created a process, a system, introduced civility, consideration and most importantly has enforced professionalism in our recovery drive so that whoever comes after me there will be a system, there is a process and culture. Recovery is a very difficult business. You have to continuously change your strategy. You have to continuously amend your Act to reflect your approach? The economy is a bit challenged, it is picking up. So your strategy must reflect that. Most importantly we had to set up a system, a strategy in order to meet our target.

  Realnews:  At what stage are you now in meeting your target?

  Kuru:  We have done 50 percent of our purchase price which is commendable. Globally, some asset management companies that have closed shop are great if they are able to achieve 60 percent. At the rate we are going we will be able to exceed that 60 percent which globally I think it is something commendable.

  Realnews: You are a very busy chief executive. Could you describe what your typical day is like?

  Kuru:  Typical busy day for me if I am in Abuja, I will meet with an average of 50 people a day. I hold meetings with about 50 staff at different times. I read a lot of files. I receive a lot of calls; I get insulted. (Laughter). It is a confusion because there is no nice way of recovery money. There is no nice way of you going to your friend to recover the money that you have loaned her. There is a nice way of giving somebody loan. But there is no nice way of collecting it. So I can tell you, I have been in the banking industry for more than 30 years. The experience, the pressure, the challenge I have confronted and entered into and I have dealt with in the last three years in AMCON, I have not encountered it in my 30-year banking career. I cannot even explain it. On the average every week you have three enemies. Some people you don’t even know. Everybody has a perspective how he feels he needs to pay his money. Somebody have taking N1billion and we paid the bank one billion naira to collect the loan. And that person believes he can raise N300 million. It is ways out of our programme. We don’t even have the power to do that. And he cannot understand why you cannot accept the N300 million. So he personalizes it. In Nigeria everything is personalized. The person thinks it is you not knowing that we operate within a framework. So you have people that believe that you can write off their loan. In real sense, we don’t have such powers and they don’t believe we don’t have such powers. Generally speaking, this is not the kind of job you will do to end your career.

  Realnews:   Why?

  Kuru: Unfortunately, you have issues with so many people. It is not a favour job. It’s an unpleasant job where you have to tell somebody to pay what he thought a time will never come when he will be asked to pay back.  And he cannot understand why you are asking him to pay after 10 years and who are you to ask him.

  Realnews: You must be dealing with powerful people?

  Kuru: Sure. When you talk about 350 people, they can’t be ordinary people in the street.

  Realnews: Have you been threatened by obligors?

  Kuru: So many times. I always tell people that our strength is that we are working for President Buhari. Because everybody knows that he is straight forward and he likes things to be done properly, so you can go to him. If you go to him he will tell  you to go and do the right thing. So we are not challenged. I always tell my colleagues here, let us do the right thing otherwise people will accuse us. They will tell us we are bad and corrupt. The will call us all manners of names. But let us be focused doing the right thing.

  Realnews: Have you had cases of a staff colluding with an obligor to circumvent justice?

  Kuru: We are human beings and we all come with our sentiments and biases.  We must always give that window. I try not to be judgemental in whatever I do. However, I always ask my colleagues that we should be professional in whatever we do. But we are happy that we are working under the president because he gives us the cover to do what is right. So we don’t care so long as we are doing what is right it does matter where you go and who you report us to. Every day we receive petition from various organs of government to explain things. And we explain and we attached a lot of document. People write petition alleging AMCON is breaking the law etc. Let me tell you AMCON never breaks any law. If I break a law how does it benefit me. I am not a bank. I force someone to pay N1 billion that he is not supposed to pay how does it benefit me because I don’t work on bonus that One billion will enter into my pocket.  How can I and the staff who works here who has the fear of God go and collect money from somebody when he is not supposed to pay. It does not make sense at all. But in Nigeria once you bring up a case against somebody he says I don’t know about this figure. I don’t know when this bank sold this loan to me. But by the time you sit down with them they will say okay, for example, it was N1 and not N2 and the truth starts coming out. But the first reaction is to attack you. But you know sometime when you sit down you ask is it worth it. And you say yes it is worth it because we have to fix our country. Nobody will come to fix this place. Isn’t it?

  Realnews: Is there any experience you have had in the past that gives you the strength to do this job?

  Kuru:   Yes, I get the strength particularly when people report me and very high level people tell me to go and do what is right. I here this from Central Bank of Nigeria, CBN, from ministers from the Presidency to go and do what is right. It gives me strength. Nobody has ever interfered with what I do here. They all say go and do the right thing. There is no better motivation than that. That is what motivates us. I am telling you the truth.

  Realnews: Can you tell me about your background? How has your parents philosophy in life influenced you to be very principled?

  Kuru:  I am just like any other human. I am not different from them we are all the same. Of course, when you are growing up you have role models that don’t even know you. One of the individuals I like is Christopher Kolade. I like the gentleman. When I see people like that I am motivated by what they do. I have had the advantage of working under bosses who are principled who are hard working. I had the advantage of working in a Habib Bank, at that time very conservative. Most of the people who are in the bank are principled. Sometimes you will be shocked who influences you. And yesterday we were talking about somebody somewhere and I told them that that young man is my role model. He single handedly set up a university without having N10,000 in his pocket. When somebody creates something from nothing it affects me positively. To create something from nothing in an environment that people have tried and they have failed. You have to appreciate and commend people that have done this. There are some people I don’t like as individuals but I like what they are doing because it is very difficult to operate around here so if you see people who have achieved certain things you have to give them credit for that. There are people who will find it easy because they are in the right place at the right time and have the right contact. There are people who have had to struggle. Even here, there are my junior colleagues, I appreciate them.

  Realnews: Did any of your lecturers in the university influence you much? Is there something they said way back that is pushing you to excel?

  Kuru: Always. I have the benefit of being trained professionally by the Pakistanis because Habib bank was run by them. They are very good with system process and integrity means a lot to them. But in those days, you appreciate lecturers like late Bala Usman, and you will want to be like them.  If you look at our President, he has held all manner of positions but has not indulged. It is only when you sit with him that you will know how concerned he is about Nigeria. And you know one person cannot change Nigeria. We have to change ourselves and work together. People will bring religion where it does not matter at all because people bringing religion don’t even go to church at all. It is only when it is not convenient for them that you here this person is Hausa, this person is Igbo. When it is convenient, you here oh he is my brother. I pray that one day we will go back to those days where we are our brother’s keepers. We look at things from the basis of issues. Not on the basis of sentiments and I think by the special grace of God we will get there. I see a determination in Nigeria to change the way things are done. This is the best place on earth. The talent in Nigeria you can’t find it anywhere else in the world. The talent here is unbelievable. We will make it by the special grace of God.

  Realnews: Who influenced you most in your life, your father or your mother?

  Kuru: My dad because I am a boy. He is disciplinary, He never raised a hand on us but when he looks at you, you will know what he is thinking. He is a man of few words. And he will convey the message very concisely.

  Realnews: Was he a teacher?

  Kuru: He was a teacher then he became an administrator. He started out as a teacher so he knew how to impart knowledge and he was very good in supporting everybody to achieve their potential.

  Realnews: Are you the firstborn in the family?

  Kuru: I come from a big family. We are more than 20. My father has four wives. But there was lots of love in the family. I am number 10 in the family.

  Realnews: Is there any other information you will like to give?

  Kuru: I urge the obligors to please come and talk to us. I do not expect that there is anybody that has N10 billion to give. But I want to genuinely discuss with the people, understand their position and see how we can work out a way for them to pay the money. Intimidation, insult and all manner of campaign of calumny will not work on us because we are covered by law. And like I always say we are influenced by the fear of God. So I want obligors to come and talk to us genuinely because one way or the other we will collect the money because it is a commercial transaction and because a loan has gone bad doesn’t make the person a bad person. There is no template that says a loan cannot go bad. Most loan go bad if they are not structured properly; if you do not adhere to the credit policy. However, we do know that because of the global economic crisis some loans were affected. So I don’t believe everybody that has a case with AMCON is bad but you only become bad when do not live up to you responsibility. We are determined to collect our money particularly from those who are planning to get political office. You want to take big responsibility but you are not meeting your commitment. So that means you can be trusted.

  Realnews: Who are those seeking political office who have cases with AMCON?

  Kuru: Quite a lot of them: About 200. Let them come and talk to us and we will see how we can work together to help to resolve the problem.

  Realnews: Who are these prominent obligors seeking political office?

  Kuru: We are going to publish their names in two-week’s time.

– Jul. 23, 2018 @ 15:25 GMT

Tags: Why I make Three Enemies Per Day – AMCON MD

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