Firm, AMCON disagree on divestment from Mainstreet Bank

The ongoing proceedings at the International Court of Arbitration (ICA), instituted by Intangis Holdings Limited may stall the divestment plans of Asset Management Company of Nigeria (AMCON) in Mainstreet Bank.

  The new twist at the threshold of the sale of the bridged bank was at the instance of Intangis, which alleged a breach of agreement it reached with Afribank Plc in 2009.

  It would be recalled that Mainstreet Bank emerged from the financial bailout programme in the banking industry by the Central Bank of Nigeria (CBN) and AMCON.

  The said agreement, tagged “Confidential and Non-Circumvention Agreement,” had held that Afribank would not enter into discussions or negotiations with any potential investor in relation to acquisition of a portfolio of non-performing loans and that of a minority stake in its share capital.

  But in a draft response to the company claims by AMCON, the bad debt agency explained that Intangis was pursuing a frivolous claim.

  According to AMCON, it was not party to any agreement with Intangis and Mainstreet was not existing at the time the agreement was reached.

  Mainstreet, which came after a special audit in the banking industry that found it, along with nine others in “grave situation,” sacked the bank’s board and management, with a view to cleaning and repositioning it.

  However, according to AMCON, with apparent lack of capacity to recapitalize before the September 2011 deadline given to it by CBN, Affribank’s license was revoked.

  But with the Nigerian Deposit Insurance Corporation (NDIC), pursuant to its enabling Act (section 39), in collaboration with CBN, executed a Purchase and Assumption Agreement, whic allowed Mainstreet Bank to purchase assets and assume certain liabilities of Afribank, while AMCON subscribed to the shares of the emerged bank.

  AMCON pointed out that Intangis’ claim, anchored on its ongoing divestment of interest in Mainstreet, is frivolous because neither it nor Mainstreet was a party to the agreement and neither party assumed Afribank’s obligations on the agreement.

  It also noted that the agreement in question had expired by November 2, 2011, and there was no subsisting or existing contract, which AMCON can be said to be breaching or inducing its breach.

  “Even if the CNCA had not expired, the ongoing transaction relating to divestment of AMCON’s shareholding in Mainstreet Bank does not constitute a prohibited transaction under its expired terms,” the response added.

Source: Guardian Newspaper