The bill that empowers the Asset Management Corporation of Nigeria (AMCON) to seize, manage and sell the assets of individuals and companies that have non-performing loans has been passed by the Nigerian Senate.

The passage of the bill portends the imminent downfall of the Honeywell Flour Mills, the Company owned by Oba Otudeko with a loan of #75 billion owed First Bank of Nigeria.

Billionaire businessman Oba Otudeko has recently been in the news for all the wrong reasons as Honeywell Flour Mills obtained the #75 billion credit facility from First Bank of Nigeria using his position as the Chairman of FBNH, and with the consent of Dr (Mrs) Awosika, ensuring that Honeywell Flour Mills obtained the loan using unconscionable methods.

The credit facility, now termed non-performing, has drawn the ire of the apex bank, the Central Bank of Nigeria, who has urged the directors of First Bank of Nigeria to do all within the ambit of the law to ensure the loan is repaid.  It is rumored however that Honeywell Flour Mills can not pay back the credit facility during the period stipulated by CBN, the regulatory body, and AMCON might be called in to recover the non-performing loan.

The asset management amendment bill empowers AMCON to deal with all financial related matters and all assets or property that can be traced to Oba Otudeko will be seized as it doesn’t matter if such asset was used as a security for the loan or not.  The legal processes for foreclosing and selling the assets of defaulters have been made easier for AMCON. 

As the Apex bank is directing the management of FBN to recover its loans from Honeywell Flour Mills it would serve as a deterrent to other defaulters that have non-performing loans in other financial institutions. The directives from Central Bank will aid the banks’ restructuring process and ensure that the ratio of the non-performing loan remains below the prudential benchmark.