AMCON battles to sell N4bn private jet

The Asset Management Corporation of Nigeria is facing major challenges in selling its N4bn private jet, which it put up for sale through a public notice about four weeks ago.

Our correspondent learnt that one of the difficulties in disposing of the airplane was the current slow demand for private jets globally.

Findings by SUNDAY PUNCH also showed that potential buyers were reluctant to approach AMCON for fear that the Economic and Financial Crimes Commission might come after them, questioning the source of their wealth.

Sources close to the deal, therefore, said it might take a longer period of time for the bad debts manager to sell off the N4bn jet.

A source said, “The way things are going, it might take some time for AMCON to get the aircraft sold. The reason is that the private jet market globally is very slow now. The demand is very slow now. People are now buying private jets. This is why you even see some foreigners bringing in private jets into Nigeria to do illegal charter.”

The source added, “Also, some Nigerians who have the money to buy the AMCON jet are not willing to show up because they are afraid AMCON may come after them to question the source of their wealth.

“And majority of Nigerians who could afford it are currently having debts issue with AMCON. That is why AMCON may be forced to sell the jet probably below profit if it is in a hurry to sell it.”

The spokesman for AMCON, Mr. Kayode Lambo, told our correspondent on Friday the jet had yet to be sold.

AMCON had, through newspaper advertorials about four weeks ago, put the Canadian-made Bombardier Challenger 605 private jet up for sale.

There had been speculations that the aircraft was confiscated from an oil mogul, Mr. Femi Otedola, following a settlement of transfer of assets he made as a result of his alleged indebtedness to AMCON.

There were also speculations that the plane might have been taken over from the Capital Oil and Gas Industries’ Chief Executive Officer, Dr. Ifeanyi Ubah, over an alleged N48.014bn debt.

However, the AMCON spokesman described all the speculations as rumours.

“The plane belongs to AMCON and now we have decided to sell it off. It is an investment,” he said.

Sources had said that a former military governor, two eminent Nigerians from the North and a chartered aircraft company had indicated interest to buy the N4bn ($27m) brand new private jet.

The corporation was said to be insisting on selling the luxury plane at a particular price, while the former governor and the two prospective buyers were offering below this amount.

Lambo said some people were showing interest in the jet, but did not give the details of the interested parties.

Whoever buys the plane will also contend with a $4,000 luxury tax recently imposed on private jet owners by the Federal Government.

The Nigeria Civil Aviation Authority had directed the owners and operators of private jets to pay the sum of $4,000 for every flight departure within the country.

According to a memo to all private jet operators and obtained by our correspondents, the NCAA ordered that Nigerian-registered private jets would henceforth pay the sum of $3,000 for every departure, while foreign registered private jets would pay $4,000 per departure.

The memo, dated August 28, 2013, and signed by the Director-General, NCAA, Captain Fola Akinkuotu, was titled, ‘Order charging certain fees on operations in general aviation.’

The memo, with reference number: NCAA/DG/OR/GA/VOL.11/2013/06, reads, “In compliance with the provisions of Section 30 (2) (q) & (s) of the Civil Aviation Act of 2006, the Authority hereby orders: All foreign registered aircraft engaging in non-scheduled operations shall forthwith pay $4,000 as fees under the provisions of the law set out above for every departure, except round trips without changes in passenger manifest, or return ferry. Such fees shall be paid in advance and prior to departure.

“All Nigerian-registered aircraft engaging in non-scheduled operations shall forthwith pay $3,000 as fees under the provisions of the law set out above for every departure, except round trips without changes in passenger manifest, or return ferry. Such fees shall be paid in advance and prior to any departure.

“This order shall be effective and in force immediately upon the date of issuance. Failure to comply shall result in denial of operations and or privileges.”

The memo is, however, generating controversy in the aviation sector, with some operators arguing that the levies are illegal and, as such, they will not pay.

But the NCAA has filed a suit at the Federal High Court, Lagos, challenging the reluctance of foreign and locally-registered aircraft operators to pay the levies.

In an originating summons dated September 23, 2013, the plaintiff (NCAA) is praying the court to determine whether by true construction of sections 30 (2) (q) and 30 (5) of the Civil Aviation Act, 2006, it is empowered to impose fees on all foreign and Nigerian registered aircraft engaged in non-scheduled operations.

The agency deposed that the payment of the said fees was to take effect from the date of the issuance of the order.

The affected airlines and aircraft operators under the aegis of the Airline Operators of Nigeria have described as draconian the policy, which they say amounts to double taxation and an illegality.

If the move by the NCAA becomes successful, it will affect pastors, business moguls and other private jets owners in the country, who will be expected to cough out about $1.4m annually as luxury tax.

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One Comment

  1. Radika Awasthi says:

    Nice one… It seems really impressive..

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