Senate Probe: CBN Orders Banks to Suspend Payment of MTN Dividends

The Central Bank of Nigeria (CBN) has ordered the suspension of MTN Group dividend payment from the Nigerian subsidiary of the telecommunications giant, until further notice.

In a quarterly update to shareholders, MTN Group said it was not guilty of the illegal repatriation charges levelled against it by the Nigerian Senate, stating that the claims are totally unfounded and without merit.

Addressing the latest developments on the alleged illegal repatriation of $13.97 billion by the group, TheCable reported that MTN said the CBN had ordered its four commercial banks in Nigeria to suspend dividend payout from the country.

“MTN Nigeria, four commercial banks, certain MTN Nigeria directors and shareholders, the CBN and others appeared before the Senate on October 20, 2016, at the outset of this investigation.”
“The allegations are that $13.97 billion was repatriated illegally by MTN Nigeria through its bankers. MTN Nigeria and its bankers are cooperating with the investigation with a view to resolving the matter as expeditiously as possible.

“In the interim, the CBN has instructed the banks to suspend any remittance of dividends until further notice. MTN Nigeria continues to refute the allegations that MTN Nigeria had improperly repatriated funds from Nigeria.

“Consequently, MTN Nigeria will strongly defend any action that would be prejudicial to its interest. MTN Nigeria has no intention to make any dividend payments over the next six months,” the update read.

Meanwhile, MTN Nigeria has restated its commitment to the payment of the N330 billion fine related to the late disconnection of ‘improperly registered’ SIMS. It also revealed that its subscriber base increased by 1.5 million in three months.

“MTN Nigeria reported a 2.5 per cent increase in its subscriber base to 60.5 million (QoQ). The reported subscriber base was negatively impacted by the exclusion from our active base of approximately 3.1 million subscribers relating to a change in subscriber accounting rules.
“On the upside subscriber numbers were supported mainly by reconnection through proactive engagement following their disconnection in line with regulatory requirements earlier this year,” TheCable further reported.

After the disconnection of unregistered SIM cards mandated by the Nigerian Communications Commission (NCC), MTN subscriber base fell to 58.98 million in Q2 2016, from 61.25 million at the end of 2015.