Managing Director of, AMCON, Mustafa Chike-Obi
By Yemi Adebowale
The decision of the Assets Management Corporation of Nigeria to vacate
the premises of Capital Oil and Gas Industries Limited on Thursday
morning, contrary to its earlier position not to do so (despite a court
ruling) was borne out of the need to protect the interest of the
Nigerian public.
The Managing Director of, AMCON, Mustafa Chike-Obi stated this in an exclusive interview with THISDAY in Lagos, yesterday.
He said even-though AMCON could have remained at the premises until the
Court of Appeal rules, it decided to vacate the premises because "we
want to make sure that we are not associated in any way with anything
that might have to do with scarcity of petroleum products."
Chike-Obi explains further: "We had a number of considerations in mind.
The first one was the public interest. There was a pipeline explosion
in Lagos and we do not want AMCON to be associated in any way with
shortage of petroleum products during the holiday season. So, even
though we believe that the impact of Capital Oil is minimal, we still
want to make sure that we are not associated in any way with anything
that might have to do with scarcity of petroleum products.
"The second reason we vacated the premises was that we don’t want a
situation where we are there and people are saying we are not obeying
court order. Even though our legal position is strong, we don’t want to
be seen as somehow defying the court decision.
"Another reason is that we were also worried about liability. So,
having considered all the issues, we have decided that while pursuing
every legal action, we will vacate the premises until we get another
order that is specifically asking us to take over the property Then we
will take action."
The AMCON boss also justified the decision to shut down capital Oil’s
premises: "Let me give you the chronology of events. We acquired these
loans in December 2010 and we have been talking to this gentleman since
then. He has signed 2 or 3 agreements with AMCON and he has reneged on
all of them for various reasons.
"He was on the news recently of some civil dispute with
Coscharis/Access Bank for which they had gone to the UK and obtained a
freezing order worldwide. Some of the assets that were under that
freezing order were assets that AMCON has the legal mortgage to for the
debt it possesses. So, we felt it was important for us to protect or
indicate to the world our interest in those assets and that’s what we
did."
On whether the value of Capital Oil and Ifeanyi Ubah’s assets could pay
the company’s debt, Chike-Obi said he believed so, "but we cannot be
sure until we get the full extent of the assets and value."
He said further: "Capital Oil assets are impressive. He has trucks and
depots all over the country; a jetty that is world class and includes
vessels. But he owes other people and so we do not know how all of that
will sort out. But we hope we can recover much of our money one way or
another."
The AMCON managing director disclosed that Capital Oil’s debt was now
N65 billion: "It was N53 billion plus N12 billion of interest
accumulated over the last 2 years and the interest is accruing at the
rate of about N800 million to N900 million a month.
"This is a situation where people owe that kind of money (and I am not
passing judgement) but the lifestyle of the person that owes does not
demonstrate that they are indebted to Nigerians. It was Nigerian
depositor’s money that was used to build those facilities and it is
AMCON’s responsibility to the depositors to get that money back.
"We have a lot of other debtors in the oil and gas downstream industry.
In fact, many of them have come and have settled in good faith and they
have been restructured. We have found Capital Oil and Gas to be
recalcitrant, reluctant and unwilling to pay. I believe that his case is
more of an unwillingness to pay than inability to pay and that is very
unfortunate."
He also said the loss declared by AMCON for the 2011 financial year was
expected: "it was anticipated and it did not come as a surprise to
AMCON because it was planned for. The loss came about because we had to
restore the depositor’s funds that had been lost in the banks.
"So, 90 per cent of that loss is a one off event based on the
restoration of deposits to the banks and that was N2.1 trillion of the
loss. The rest of the loss comes as a result of accounting. We issued
bonds to buy the non-performing loans and replace these depositors’
funds."
ThisDay