Capital Oil: AMCON as a corporate grave yard

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By Clem Aguiyi

The speed by which government agencies such as the Economic and Financial Crimes Commission (EFCC) and the Asset Management Corporation of Nigeria (AMCON) etc take over troubled ongoing corporate concerns, you will think they have any magic wand to turnaround things or do better than the original managers; instead they become ultimate undertakers and corporate graveyards.

AMCON for instance was established to take over non performing loans from eligible financial institutions and also to manage the assets of the distressed companies for the purpose of assisting the said companies recover from insolvency. This is why we spend tax payers’ money on AMCON otherwise its intervention is unnecessary and existence not justified.


How many of the over 400 companies taken over by AMCON has it assisted towards recovery? My research showed negative. Instead, every single company touched by AMCON is wiped out, killed and deleted. Not that anyone expected the works of the corporation to be any easy knowing it probably will be dealing with recalcitrant debtors. Is AMCON another lost vision? The truth lies in the Nigerian factor.

Section 16 of the Act which precludes ‘members of the Board or any employee of AMCOM from being either directly or indirectly involved in the purchase of, or the acquisition of an eligible bank assets or the enforcement or realization of any right relating to an eligible bank asset acquired by the corporation’ are mere decorative and flowery words to corrupt officials who rather observe the provision in breach.

Some weeks ago, I had reasons to be in Lagos around the Apapa neighborhood where Capital Oil and Gas has her corporate head office. Capital Oil and Gas Ltd we may recall is a company with assets of strategic national importance in the downstream sector whose woes started with reclassification of obligor limits by CBN and the aborted deregulation policy of the Federal Government of Nigeria in 2011 where by the company suffered huge losses after having invested over $150m in acquiring state of the art vessels, dredging, jetties and loading points.

What I saw at Capital Oil left me depressed. The sprawling premises that hitherto employed over 1400 workers with over thirty loading points is now a ghost of itself. The high level of devastation visited on the place is better imagined. The facility is overgrown with weeds, the buildings cracked and equipments vandalized. The extent of dilapidation can only compare to Ajaokuta Steel if not worse. I wept for Nigeria. Who did this to us?

It was on the basis of the above that I decided to research into the relationship between Capital Oil and Gas Ltd and their nemesis called AMCON. During the course of my research, I related with high level insiders in both organizations who are in position to know. I discovered mind boggling webs of intrigues nose-diving into a high scale conspiracy by top notch players to either privately acquire the company or kill it.

To actualize this conspiracy, AMCOM in 2012 procured a jankara judgment from a Federal High Court freezing Capital Oil’s assets, an order later quashed by the same court upon discovering that AMCON did not put the defendant on notice. The court in its considered ruling held that which held that the purpose of establishing AMCON was to assist Nigerian companies to recovery and not to drive them to insolvency.
Consequent upon the above, AMCON and Capital Oil decided to settle t out of court. There mutual agreement was entered as consent judgment in 2013. The consent judgment stated that Capital Oils eligible bank assets will be repayable in 9years.

Under the consent judgment AMCON was to inject $100M into the recovery of Capital Oil while Capital Oil is to transfer assets worth N78.85 Billion to AMCON. It was also the obligation of AMCON to conduct an independent valuation of the assets provided by Capital Oil.

It’s on record that Capital Oil surrendered her assets as prescribed by the consent judgment while AMCON never complied with her own side of the obligation to date. Even when AMCON demanded for additional asset totaling N15BN capital oil responded positively despite this new demand being outside the consent judgment.

Instead of showing good faith AMCON proceeded to sack the entire management Staff of Capital Oil .The Managing Director was for instance replaced with an expatriate who proceeded to strip the company of her valuable assets and rendered the once vibrant company comatose before vamoosing into thin air? Where is Mr. Ryan Johnson? He needed to be brought back to Nigeria to account for his two years at the helm of Capital Oil.

To cover her robbery of Capital Oil Assets which included sale of oil tank badges and tug boats: Dera 2, Marvel 1, Kenashi RTC 90, Kasavubu RTC1105, Freetown BTF 38, Runner Echo, Hercules Runner Foxtrot , Runner India (Socrates), Runner Hilhorough (Heron) Centurion (Runner Gulf), Mars ( Runner J’bourg) and Runner Kinshasa (Pioneer) and several attempts to under sell Capital Oils assets in Banana Island AMCON now resorted to a familiar route typical of the feudal system to criminalize what ordinarily was a failed commercial transaction.

Businesses fail for different reasons, sometimes as a result of inconsistent government policies. And it is in this understanding that the government thought it wise to assist strategic companies to stay afloat in national interest.
AMCON is sick and very sick too. The corporation needs to save itself to enable it save the companies it came to rescue. The new CEO of AMCON, Mr. Lametek Edward Adamu whom I understand is a fine gentleman has a serious and urgent job to do, first of which is the courage to deal with the monsters bedeviling AMCON and I don’t envy him for one moment. His appointment is timely and for a purpose. He must not like his predecessors let Nigeria down. AMCON by all means is not designed as a corporate grave yard.

Nigerians want to see AMCON under the new leadership of Mr. Adamu rescue at least one company if it cannot rescue hundred. To achieve this, the new AMCON boss beyond documenting names of chronic debtors needs to critically evaluate why AMCON past strategies has failed by first identifying the real problems with AMCON management and addressing them with a high sense of urgency.

He may have to look at the corporation’s current strategy and why it has so far failed. Reviewing and redefining the strategy will require an audit of the competency of the people working in AMCON in both senior management and middle cadre. Truth is that if the employees are not committed and not properly incentivized to the vision of the corporation there will be no way it can achieve the high ends of the corporation’s mission.

Therefore tough decisions must have to be taken. I expect that Mr. Adamu must get to work and get real busy too. He must define his plan, own the plan and work towards the plan with a team of a passionate and committed assistants. Officials whose gusto is to make the corporation a corporate grave yard must be held accountable for their actions.

Those who can’t fit into a disciplined team should be shown the way out. The new mission must be how to save jobs , keep the economy going by assisting ailing companies back to solvency.

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