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A couple of weeks ago, we read the interview of the Managing Director of the newly constituted Asset Management Company of Nigeria (AMCON), Mr. Mustafa Chike Obi on the pages of some national dailies, stating how AMCON will value the ‘Toxic Assets’ in the banking sector. According to him, the eligible assets to be valued under his administration are in three categories: one, loans that were backed by securities or listed shares of companies, two, loans that are backed by other collaterals or receivables in perfected or perfectible state, and three, loans without collateral: ineligible securities either because they were not perfected or are not perfectible.

Mr. Obi however  mentioned the  fourth category of assets but did not state how those assets will be valued for sale as he stated that there is a clause in the AMCON Act that allows the Company  to acquire what  he  called “TAINTED ASSETS”  and  defined those assets  as those acquired by bank officials as a result of  deliberate mischief  including insider loans given to bank officials and relatives, fraudulent loans etc. Further he explained that   those ‘tainted assets’ may be acquired by AMCON but foreclosed the prospect of forbearance to anybody or institution while stating that AMCON is actually precluded by law from granting any forgiveness whatsoever for such loans. In conclusion, he declared that “AMCON will procure such loans with full force of its powers to its fullest extent”

It is clear from the above statement and the enabling laws that AMCON is an establishment owned by the Federal Government of Nigeria, managed through the Central Bank of Nigeria (CBN) and Federal Ministry of Finance, and that AMCON is an implementing Agency whose operational policies originate from the CBN/Federal Ministry of Finance being the owners and Agencies statutorily responsible for monetary and fiscal policies of the Government of Nigeria. And that its mandate include the disposal of assets owned by (forfeited to) government.


There are at the moment several concerns being raised by the public with respect to AMCON, which include but not limited to how eligible assets will be valued, whether AMCON will use the bank’s contribution to AMCON to buy shares in the banks and the role of shareholders and the public in the decision making process of AMCON. There were even law suits trying to stop the establishment of AMCON in the early stage of its conception. However one area that is not yet mentioned in all the reports read and which is not yet made clear to the public is the issue of the STATUTORY REGULATORY LAW AND POLICY that will be applied by AMCON with regard to public procurement (acquisition and disposal of assets), such as the disposal of assets of economic value forfeited to AMCON by court order. There are also concerns on who gives final directives on appraising or estimating the worth of these assets having economic or monetary value before their disposal.

In analyzing the above situation, it will be helpful to draw our attention to the fact that not too long ago, various   newspapers in Nigeria, featured articles and opinions on  whether such similar forfeited assets  to the Federal Government were properly disposed off or not by the Economic and Financial Crimes Commission (EFCC)  under Malam Nuhu Ribadu.

In an article by  Yemisi Adeniran and Segun Otokiti in the Nigerian Compass of  Sunday 04 April 2010 they stated that “An EFCC  Asset Sales Committee (a post Nuhu Ribadu) observed  that the Attorney-General of the Federation; the Minister of Works; the Accountant-General of the Federation and the Auditor-General, who ought to be parties in the disposal of property forfeited to the Federal Government as stipulated in the EFCC Establishment Act and as required by Financial Regulations 2520 (Revised 2006) were not briefed by the Secretary of the Commission when assets were sold” Further publication claimed that “The Committee observed that the rules for evaluating forfeited property were not followed as Financial Regulation 2509 (d) (Revised 2006) provides for the involvement of the Ministry of Works in the valuation process, while 2510 (Revised 2006) provides for consultation with the Accountant-General of the Federation”

Also that the Committee raised the issue of unilateral appointment of sole Valuers; Manager; Rent Collector and Auctioneer and that this negates the checks and balances necessary for the transparent disposal of the forfeited assets and due diligence in the process of the sales.

It is necessary to add here, for the purpose of record that on the above issues it was also reported in the same medium that the EFCC spokesman, Femi Babafemi stated that although he was aware that a Committee was set up to look into the disposal of some assets, he could not say whether the Committee had submitted its report or not. Therefore, for avoidance of the repeat of accusations and counter-accusations it is important to avail a professional view and advice to the Managers of AMCON and all the stakeholders in the disposal of these forfeited assets to AMCON as a means to ensuring that the rule of law, due process, transparency, fairness and accountability prevail in the resolution of the forfeited assets


Before proceeding further, it is necessary to state the following facts that are not in dispute and to emphasize at this point that what we are concerned with here is FORFEITED ASSETS through a court order as defined in law (and as in the opening statement), and not ELIGIBLE ASSETS defined under the AMCON Act:

1. That the forfeiture  of assets from the former Managing Director of Oceanic Bank to AMCON as ordered  by court  means automatic loss of ownership right (title) to personal or real properties in question by the former Managing Director of Oceanic Bank in favor of the Federal Government of Nigeria through AMCON,  for certain offences under the Nigeria law, (or at least as a court ordered compensation for loss or damage to the plaintiff which is Federal Government of Nigeria acting through AMCON/ EFCC).

2. That “AMCON is created as a resolution vehicle to help resolve the crises in the banking system and is expected not only to be fair to all the stakeholders but shall be transparent, accountable and with integrity” - according to Chike Obi

3      That Transparency in Procurement including disposal of assets  requires  that laws, regulations, institutions, processes, plans and decisions are made accessible to the public at large or at least to “representatives” of the public so that processes and decisions can be monitored, reviewed, commented upon and influenced by the stakeholders, and decision makers can be held accountable for them.

4      That Fairness in Procurement including disposal of assets  requires  that decisions should be fair and impartial and that public funds/assets  should not be used to provide favours to specific individuals or companies, standards and specifications must be non-discriminatory, suppliers, consultants providing services  and contractors should be selected in the basis of their qualifications and the merit of the offers, there should be equal treatment of all in terms of deadlines, confidentiality and so on.

5     That Integrity in Procurement including disposal of assets requires that the disposal processes are honest and in compliance with the relevant laws, that the best available, most suitable technical expertise is employed in a non-discriminatory manner, that fair and open competition leads to a quality service at a fair price (value for money) and that the product/service takes into account the legitimate aspiration and concerns of the stakeholders.

6    That Accountability in Procurement including disposal of assets requires that governments, public (government owned or controlled) institutions or corporations and individual officials, on the one hand, and companies executives and agents or other individuals acting on behalf of companies, on the other hand, must be accountable for the correct and complete execution of their tasks and duties and for the decisions and actions being made in their area of responsibility.

On the basis of the above, let us therefore review other facts of law that are not disputable regarding AMCON which include the following:

1. While interpreting the principle of waiver in the case of Ogbonna v AG of Imo State (1992) CLR 2 (b) of February 7th, 1992, the Supreme Court ruled that ‘There is a distinction in principle between a non-compliance with a rule and non observance of a statutory provision on a substantive issue. While the former can be waived, the latter renders the act illegal, null and void and of no effect and therefore is not capable of being waived’

2. That AMCON is not a creation of the CBN but a creation by an Act of the Parliament with the Ministry of Finance and CBN as supervisory authorities while the National Council on Public Procurement (yet to be inaugurated) and the Bureau of Public Procurement, are responsible for procurement management policies including disposal of assets in accordance with the provision of the Public Procurement Act 2007.

3. That while the Ministry of Finance is responsible for fiscal policies of AMCON, the CBN is responsible for the monetary policies and the National Council on Public Procurement has overall responsible for the policy on procurement, such for goods, works and services including disposal of any tangible and intangible assets as contained in Section 55 of Public Procurement Act (PPA).

4. That the National Council on Public Procurement with the Minister of Finance as Chairman and the  Bureau of Public Procurement (BPP) serving as the Secretariat   was  established  in 2007 by  the National Assembly  under   the Public Procurement Act of 2007, by virtue of the provisions  of Section 4(2)(4)(a) and (b), Chapter II, Sections 5(1),148,177 read together with  Part II,  7th Schedule of the 1999 constitution.

5. That in accordance with the provisions of Section 15 of the Public Procurement Act 2007, the Act shall apply to all procurement of goods, works, and services carried out by: (a) The Federal Government and all Procuring Entities (including AMCON), (b) All entities outside the foregoing description which derive at least 35% of the funds appropriated or proposed to be appropriated for any type of procurement described in this Act from the federal share of the Consolidated Revenue Fund (CRF).

6. That an exemption/waiver in the provisions of the Public Procurement Act 2007 is that it shall not apply to the procurement of special goods, works and services involving national security unless the President’s express approval has been first sought and obtained. (This is not strange if Chapter 2 of the 1999 Constitution and the Oath of Allegiance and Oath of Office of the President in Part II , 7th schedule of the Constitution is taken into consideration by any person who may be wondering why the above exemption and the requirement of the express approval of the President on such security procurement).

7. In accordance with Section 55 of the Public Procurement Act 2007, the section shall apply subject to the Public Enterprises (Commercialization and Commercialization Act 1999).

While it is a fact of law that AMCON is specifically exempted or enjoyed statutory waiver in their enabling Act from the provisions of Capital Gains Tax Act or such other laws of the National Assembly on capital gains, it should be noted however that it does not apply in Public Procurement Act 2007.

And bearing in mind that AMCON is owned by Federal Government through Federal Ministry of Finance and CBN, it is therefore required under the law for each to establish a Procurement Department to be headed by a professional and also a Procurement Planning Committee as part of its management structure. By this, we should also be guided by the provisions  of Section 4(2)(4)(a) and (b)  read together with  Part I,   Schedule  49 of the 1999 Constitution, where the National Assembly  used the  powers vested in them by the Constitution to declare Purchasing and Supply (including Procurement, logistics, stores management, warehousing, supply) as  a professional occupation.

For the purposes of the procurement Act every procuring entity in Nigeria is also a disposing entity (Section 55 (2) of PPA), therefore AMCON is one of the procuring entities referred to in Section 15 of PPA. Accordingly, Open Competitive Bidding (OCB) shall be the primary source of receiving offers for the procurement, including disposal of any public property offered for sale.

Additionally, Section 55 of PPA states that the Bureau of Public Procurement (BPP) shall with the approval of the National Council on Public Procurement:  (a) Determine the applicable policies and practices in relation to the disposal of all public property;  (b)Issue guidelines detailing operational principles and organizational modalities to be adopted by all procuring entities engaged in the disposal of public property; and (c) Issue standardized document, monitor implementation, enforce compliance and set reporting standards that shall be used by all procuring entities involved in the disposal of public property.

That for the purposes of this law, (PPA 2007), public property is defined as resources in the form of tangible and non-tangible assets (ranging from serviceable to the unserviceable): (a) Created through public expenditure; (b) Acquired as a gift or through deeds; (c) Acquired in respect of intellectual or (d) Proprietary rights; (e) Acquired by goodwill and any other gifts of the Federal Government.

Also, the statutory powers of the Bureau of Public Procurement as contained in section 6 of the Public Procurement Act 2007 includes among others to: (a) Enforce the monetary and prior review thresholds set by the Council for the application of the provisions of this Act by the procuring entities, (b) Subject to paragraph (a) of this subsection, issue Certificate of “No Objection”, for contract award within the prior review threshold for all procurements within the purview of this Act, (c) From time to time stipulate to all procuring entities, the procedures and documentation pre-requisite for the issuance of Certificate of “No Objection’ under this Act; and (d) Where a reason exist: (i). Cause to be inspected or reviewed any procurement transaction   to ensure compliance with the provisions of this Act. (This include the inspection of AMCON Assets Disposal transactions) ii) Review and determine whether any procuring entity has violated any provision of this Act; (In this case determine if AMCON has violated any provision of Public Procurement Act in the disposal of Assets).
The supreme court stated in a judgment delivered on 4th October 1991 by Justice Nwokedi in the case of Agbai Vs Okogbue (1991) CLR 10(a) (SC) that the Principles of rule of law are:- (a) The absolute supremacy of law as opposed to the exercise of arbitrary power;  (b) Equality of persons before the law; (c) That the constitution is the result of the ordinary law of the land as interpreted by the courts.

Section 20 of the Public Procurement Act 2007 states that the accounting officer of a procuring/disposing entity (in this case the Managing Director of AMCON) shall be the person charged with line supervision of the conduct of all procurement/disposal processes.  In the case of Ministries, the Permanent Secretary and in the case of Extra-Ministerial Departments and Corporations, the Director-General; or officer of coordinate responsibility which in this case is the Managing Director of AMCON.

The Accounting Officer (in this case the Managing Director of AMCON) of every procuring entity shall have the overall responsibility for the planning of, organization of tenders, evaluation of tenders and execution of all procurements and in particular shall  be responsible for ensuring compliance with constituting the procurement Committee and its decisions; the provisions of this Act by his entity and liable in person for the breach or contravention of this Act or any regulation made hereunder whether or not the act of omission was carried out by him personally or any of his subordinates and it shall not be material that he had delegated any function, duty or power to any person or group of persons.

Also in the judgment of a Court of Appeal, if a person is not competent/has no jurisdiction to do anything, anything that it does, no matter how correct or regular cannot be valid. (See Shell Trustees (Nig.) Ltd v Imani & Sons (2000) CLR 6(b) (CA). In other word, when a person lacks competence or jurisdiction to do anything, anything that it does, no matter how correct or regular cannot be valid.  In this case, the legal competence and jurisdiction for the disposal of public assets is vested in the Bureau of Public Procurement (BPP).
In consideration of above submissions and the Oath of Office of the President of Nigeria requiring him to protect Chapter II of the 1999 Constitution, AMCON cannot  dispose public assets of certain thresholds limits  (to be determined by the National Council on Public Procurement) unless the proceedings and processes for such disposal are supported with certificate of ‘No Objection’ from the Bureau of Public Procurement, minutes of the Tenders Board of AMCON awarding the disposal and approved by the Board of Directors of AMCON  as well as supported with the approval of the President/Federal Executive Council.

A ‘No Objection Certificate’ to be issued by the BPP in support of the assets disposal proceedings conducted by AMCON is to certify that a due diligence is followed after a procurement audit exercise for the disposal of the assets. In addition, there is at the moment a judgment of the  Federal High Court, Lagos,  by Justice Dan Abutu  that the former Oceanic Bank Managing Director should  forfeits 199 assets and funds worth over N190 billion in favour of the Assets Management Corporation of Nigeria (AMCON). Thus AMCON is required under law to engage on competitive basis, from time to time, such professionals consultants and advisers and other service providers as are necessary or expedient for the performance of its functions.


1  Whether  without the National Council on Public Procurement being inaugurated and BPP reconstituted in accordance with Section 7 of PPA and section 11(9) of  CIPSMN Act, AMCON  can legally value,  conduct due diligence and dispose the assets forfeited  to them  by a court order in accordance with the rule of law and due process, and in a manner that will be generally adjudged by the public, particularly the shareholders of the respective banks, as transparent, accountable, with integrity  and fair to all concerned? 
The answer is NO, by virtue of the Sections of PPA and CIPSMN Acts quoted above, other legal facts outlined in this report and particularly with respect to the Appeal and Supreme Court decisions also stated above

2. Whether by virtue of the provisions of Sections 5(c ), 6 ,16 and particularly sections 16(1)a-b and Section 16(4) of Public Procurement Act which deals with fundamental principles for procurement in Nigeria and powers of the BPP, the appeal and Supreme Court decisions outlined above, sections 7, and 8 of PPA and section 11(9) of CIPSMN Act 2007. AMCON Board including the, FEDERAL MINISTRY OF FINANCE, CBN, SECURITRIES AND EXCHANGE COMISSION, NDIC, etc can enter into an Asset Disposal Contract that will not be considered illegal, null and void in respect of those assets forfeited to AMCON by Court Order?

The answer again is NO. There is no waiver for AMCON with respect to observance of provisions of PPA, they are bound by the provisions of the Act considering the Supreme Court definition of Rule of Law and that ‘when there is no legal capacity to do a thing, no matter how well done, the action is invalid’.


In view of the daily unfolding phenomenon about AMCON and the unanswered salient issues regarding the public/shareholders’ rights and obligation, it is our candid  advice that this professional review be taken into consideration by all stakeholders, to avoid the errors of the past and save AMCON from any further embarrassment.

More importantly, AMCON management and other stakeholders should take into consideration the relevant laws on asset disposal and/or acquisition as it affects public (government) and apply same in the interest of Nigerians.

Mohammed Bougei Attah is purchasing and supply chain management professional and Managing Editor, NGO Network, a general interest magazine for the non-profit monitoring public procurement corruption in Nigeria.


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