Why AMCON’s take-over of Victory Park Estate is legal

The Asset Management Corporation of Nigeria (AMCON) is empowered by an Act to, among other things, “hold, manage, realise and dispose of eligible bank assets (including the collection of interest, principal and capital due and the taking over or collateral securing such assets)”.


This function is not in doubt, but the corporation has often faced resistance, attacks and blackmail in its discharge of this statutory duty.

Recently, AMCON has come under severe blackmail and media attacks over its take-over of Victory Park Estate, Lekki, Lagos.

The property is a 46-hectare land of which some parts have been developed.

In 2002, the Lagos state government under the private developers’ scheme allocated the land to Knight Rook Limited. But the company was unable to pay for the property; Lagos state then demanded a bank guarantee to cover the payment.

Grant Properties, the promoters of the asset, approached a consortium of banks – Sterling, Wema, Unity and Skye - for the guarantee. Grant Properties was a shareholder of Knight Rook Limited before it transferred its shares to the four banks led by Sterling Bank in 2006. At all times, the property belonged to Knight Rook Limited and not Grant Properties.

Grant Properties failed to make payment to Lagos state on an agreed date, the state government then claimed the due funds on the guarantee from the four banks.

Since the property was in the name of Knight Rook Limited, the banks made full payment for the Land. (Awosedo did not contribute any money to the purchase of the property).

The banks demanded a repayment, but Grant Properties was unwilling to repay. In 2006, the property was foreclosed, and all the shares of Knight Rook Limited were transferred to the four banks which appointed directors to run the entity. This meant that the banks owned Knight Rook.
Grant Properties transferred all its shares to the banks - Awosedo and his wife resigned from Knight Rook Limited. Knight Rook secretariat and administrative matters were domiciled in Sterling Bank which was the lead bank.

By an MOU, the banks also appointed Grant Properties as a developer to develop the phase one of 90 flats at Victory Park Estate. The banks funded and sponsored the phase one development. The four banks also paid the salaries of Awosedo’s staff during the period. Upon completion of phase one, the construction loan granted to Grant Properties by the banks was not repaid. The project was subsequently declared a loss.

At this point, Grant Properties’ debt figure was over N10 billion. The consortium of banks explored every avenue to recover their money without success.

The banks later discovered that Awosedo diverted nine of the flats to his children and family which was an abuse and breach of trust. As a result, the consortium of banks was unwilling to provide more loans, and the loan given was classified as a bad debt. The banks further resolved to transfer the debt to AMCON.

However, before the debt could be purchased by AMCON, the banks needed to refund all the creditors and depositors.

Grant properties proposed the sale of 10 hectares of the land to raise funds to repay some of the debts. The four banks gave Grant Properties two years to find a buyer, but the real estate firm reported after two years that it could not find a buyer owing to the economic situation of the country.

So, the banks found a buyer, sold the 10 hectares and refunded all the depositors from the proceeds. In the process, the banks lost a lot of money. This meant that even if the land was sold at a higher price, Grant Properties would not have received the money because it would have been applied to repay the remaining debts which were written off by the banks before the eligible bank asset (EBA) was transferred to AMCON.

The four banks also agreed to transfer the remaining 14 hectares to AMCON as consideration for the EBA purchased from the banks. Considering the fact that this was depositors’ money and pressed into a tight corner, the banks sold the bad debt to AMCON. The corporation bought the liability for N5.1 billion which was not enough to cover the N10 billion debt sum which meant that the banks lost N5 billion.

Awosedo of Grant Properties is now alleging that AMCON colluded with the banks to sell “his land” - a piece of property that was never his.

He is also claiming that he has a legal right to Knight Rook Limited; hence he could take decisions on its behalf.

But a Federal High Court in Lagos has given verdict on his claims.

In October, Justice J Buba made an order forfeiting all and any residuary rights, which Awosedo might have to Knight Rook Limited.

The order also affirmed the legality of AMCON’s take-over of Victory Park Estate. This made the corporation’s position on the asset unassailable.