Nigeria risks losing N4.9bn over AMCON private jet deal

Nigeria stands the risk of losing $31 million, about
N4.96 billion as Mr. Mustafa Chike-Obi, Managing
Director and Chief Executive Officer, Asset
Management Corporation of Nigeria, AMCON,
yesterday, admitted that it was a mistake on the part
of the corporation to have acquired a private jet as
part of its debt recovery efforts.
He stated this while speaking at the Board of
Directors Association of Nigeria, BDAN symposium on
'The impact of AMCON on the Nigerian Economy' in
Lagos.
Indications emerged that AMCON might have
difficulty in recovering the $31 million spent in the
acquisition of the jet, as Chike-Obi disclosed that
AMCON "ïs currently experiencing difficulties in
selling off the jet."
It was learnt that the corporation had been incurring
storage costs on the plane in the last eight months in
order to continue to keep it airworthy.
Chike-Obi said AMCON was offering to sell the jet for
$28 million, but it has been gathered that
prospective buyers are offering far below the
amount.
It was learnt that there was little hope that
prospective buyers would offer higher amount for the
jet due to the falling prices of private jets globally.
Explaining how the private jet was acquired, he said,
it was collected from a business executive through
an asset transfer deal in settlement of his
indebtedness.
According to him, AMCON had this customer, who
was highly indebted. He came to them and said he
had assets which he would willingly relinquish, but
asked to be left with some of his assets amounting to
just five per cent. That included his living house, a
house in Abuja and others.
Chike-Obi said: "If we don't do that, he will go to
court and we knew it will cost us more than ten per
cent if went to court, so we surrendered.
"But as we were negotiating with the gentleman, we
found out that he had deposited $4 million, (N640
million) with an aeroplane company for a private jet.
So we said, 'no, you cannot be negotiating with us
and be buying private jet.'
"We told him that we will take over that $4 million,
and he said he will give us back the $4 million, but
the aeroplane company will not give us the money
unless we complete the purchase of the private jet.
"So we decided to complete the purchase and took
delivery of the plane. But we have encountered
difficulty in selling the plane.
Regret
"We did not anticipate such difficulty. Had we known
that would happen, we would have let the $4 million
go and that was a mistake on our part.
"Everybody makes mistakes. It was an honest
mistake based on the fact that we did not want to
allow the customer to settle with us and go ahead to
buy aeroplane."
He explained that AMCON put in additional $27
million to complete the purchase of the private jet as
the total cost was $31 million (about N4.9 billion).
He, however, refused to name the customer that was
involved even as he said that the corporation already
had a buyer and they are close to disposing of the
plane.
Speaking on the extent of the debt recovery so far,
he said: "We are recovering about 112 per cent and
we are getting more than we paid for the loans so far.
That means that on the non performing loans side,
we are making profit, but we have other things.
"We capitalised the banks with N2.3 trillion and that
is not going to be wrapped together with the sinking
fund."
He also disclosed that Enterprise and Mainstreet
banks will be sold this month.
"Enterprise will be sold first and then Mainstreet
second," he said.
He added that he hoped that both transactions would
have been concluded by September this year.
He did not, however, disclose who the buyers would
be, but said there are interested buyers, who cannot
be named because regulatory approvals are needed
from both Central Bank of Nigeria, the Securities and
Exchange Commission and other regulatory bodies.

Sent From David Aniemeka