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Why The Otedola’s Zenon Oil/AMCON Debt Settlement Deal Must Be Investigated

June 5, 2015

“A lie is a lie even if it is told a thousand times."

The commencement of this new administration in piloting the affairs of Nigeria couldn’t have come at a better time than now, considering the spiral downfall of the nation’s resources owing to allegations of mismanagement and massive corruption by a few individuals at the detriment of the poor and downtrodden. Notwithstanding so much efforts being made to daily conceal and misinform Nigerians on the true picture of the country’s state of health, as regards the handling of its premier asset (oil), Nigerians are not willing to be taken for a joy ride anymore as their hope has been strengthened by the emergence of President Muhammadu Buhari, who has consistently reiterated his commitment to the rule of law and the eradication of corruption in high places.


In moving forward therefore, all allegations of corrupt practices against government corporations from 2011 - 2015 must be investigated in other for Nigerians to have confidence in the new administration. Those without questionable/fraudulent transaction need not be afraid. The Freedom of Information Bill signed into law by the previous administration must be utilized to its fullest in other for Nigerians to experience the impact of democracy at its peak.

It is therefore imperative for Buhari's administration to take a second look at the debt settlement deal between Zenon Oil and Gas and Forte Oil Plc, owned by Mr. Femi Otedola and Asset Management Corporation of Nigeria (AMCON). Needless to say that many Nigerians were stunned by the way and manner AMCON - the special financial institution founded to clean up the toxic assets of the banks in accordance with the provisions of the law - hurriedly announced the settling of ZENON Oil debt with the real terms of settlement still shrouded in secrecy till date.

It had been widely reported that Zenon Petroleum and Gas Limited and Forte Oil Plc had paid up an outstanding debt of over N140billion owed the Asset Management Corporation of Nigeria. But what is however disturbing is that the sudden final settlement of this huge debt was shrouded in secrecy and established under a supposedly "binding confidentiality agreement." 

It is also pertinent to note that one of the cardinal provisions in the AMCON Act stipulates that all operations of AMCON be published in the media with copies made available to the National Assembly, Ministry of Finance and the Central Bank of Nigeria (CBN). It must therefore be noted that the ZENON OIL/AMCON deal failed to adhere to this laid down procedure.

AMCON's Managing Director/Chief Executive Officer, Mr. Mustafa Chike-Obi, had said the 'settlement' was reached with Otedola after over six months of long drawn-out meetings and negotiations during which his assets had to be valued by an independent valuer (who is this independent valuer?) to ensure that they were commensurate with his debts. Chike-Obi had also revealed that Otedola proposed to forfeit assets and an “undisclosed” sum of cash as part of the final settlement, adding that the board of AMCON had accepted the proposal but the deal is awaiting execution. Chike-Obi also confirmed that the AMCON board approved the transfer of the businessman’s assets as well as undisclosed cash to AMCON as full payment and final settlement of the liabilities. 

The AMCON MD had further rationalized the heist by saying that the Corporation acted within its mandate and the settlement with Otedola, whose non-performing loan is the largest in the financial sector, describing it as a historic deal for Nigeria and the economy.  “It is a proposed settlement, but yet to be executed,” he had said. The big question that must be asked is: Was the settlement ever executed? Which of Otedola's assets were used to offset the huge debt? These questions must be answered by AMCON, otherwise President Buhari’s administration must not only ensure that the deal is thoroughly investigated and where there are glaring breaches, make an example of those indicted within the ambit of the law, on how not to connive and conspire to defraud the Nigerians people.

Chike-Obi's claim that the deal was ratified by the AMCON board and Otedola had transferred some of his assets as well as an undisclosed sum of cash to AMCON as "full and final settlement" for his liabilities - for a debtor who ranked first in the list of debtors released by the CBN and as the biggest debtor to the Corporation from bank loans of N192,422,889,943.56, which was acquired by AMCON at an agreed price of N140,999,620,395.80 - is indeed totally unacceptable.

It must however be stated clearly that AMCON has failed the first test of transparency and accountability as a public institution because all funds in its reserve belong to the public (depositors and shareholders). So it behoves on AMCON to make public the assets which were forfeited by Otedola. 

Also, it is a commom knowledge that the House of Representatives set up a Committee to look into the matter.However,the report on the issue is yet to be made public to help unravel the circumstances surrounding the final settlement of the mysterious settlement of over N140billion debt owed by Zenon Petroleum and Gas Limited and Forte Oil Plc.

AMCON must come clean in this debt settlement as a first step in demonstrating the new spirit of CHANGE which the new administration stands for. For the purpose of transparency and accountability, it is expected that AMCON publicized all take-over, the same way it publicized a court order it obtained to take over Delta Steel Company in Ovwian-Aladja from Global Infrastructural Holdings Limited (GIHL), for failing to meet its debt obligations and its inability to settle a N30billion syndicated loan, which it obtained from five banks. What is good for the goose is also good for the gander, they say.

Finally, it is expedient for the All Progressives Congress administration led by our amiable President to visit all undisclosed settlements and deals between AMCON and bank debtors, in order to set the records straight and to prevent future fraudulent debt settlements by private companies because it is the sweat of taxpayers and shareholders monies that is being used to settle these bad debts. No one must be treated differently, as Nigeria belongs to all and not a group of persons or any cabal for that matter. We take solace in the soothing words of Mr. President, in his inaugural speech, when he said: “I belong to everybody and I belong to nobody” which has greatly boosted the hope of Nigerians in their quest for a greater and stronger Nigeria, hinged on fairness and the rule of law.


Comrade Timi Frank