MTN’s Shares up by 2% after CBN’s Hint on Fines Review

Emma Okonji with agency report

MTN Group’s shares rose yesterday by 2.55 per cent in Johannesburg, South Africa, after the Central Bank of Nigeria (CBN) said it was considering reducing the $8.134 billion it fined the company in August, over alleged illegal repatriation of funds between 2007 and 2015.
The CBN Governor, Mr. Godwin Emefiele, had said in London on Sunday that the apex bank may alter the $8.134 billion fine imposed on MTN Nigeria for illegal repatriation of funds from the country.

Reuters quoted Emefiele as saying, “I don’t think it will be staying at $8.134 billion. This issue will be dealt with amicably and equitably.”
Emefiele said the central bank had received documents from MTN and four banks involved in the case and that the central bank would be examining these.

He said he expected to get the results in a couple of weeks.
Emefiele also said Nigeria’s central bank would continue to intervene in the foreign exchange markets, adding that he believed in a stable exchange rate regime.

Nigeria’s current stance of monetary tightening would continue, he said.
According to Reuters, the shares of MTN Group rose by 2.55 per cent to 85.50 rand in Johannesburg, South Africa, after the CBN Governor’s comment on the planned reduction of the fine.
Barely 24 hours after the fine was announced by CBN on August 29, MTN Group shares in South Africa, had dropped by 23 per cent to a nine-year low.
Following the CBN’s announcement of the $8.134 billion fine, the trading of MTN shares on the Johannesburg Stock Exchange, was down 21.4 per cent at 84.35 rand, after touching 83 rand, a level last seen in 2009.

The CBN’s demand was the latest setback for MTN Nigeria, the South African group’s most lucrative but increasingly also its most problematic market.
It comes two years after the Africa’s biggest telecoms company, agreed to pay a fine of more than $1 billion for allowing the use of millions of improperly unregistered SIM cards on its network.
The central bank had alleged in August that MTN and four banks, Standard Chartered Bank, Citibank, Stanbic IBTC Plc and Diamond Bank Plc, illegally repatriated the sum out from the country.

MTN Nigeria thereafter went to court to challenge the directive of the CBN. In a suit at the Federal High Court, MTN Nigeria had prayed the court to restrain the CBN from taking further action in respect of the order.
Aside the N8.134 billion fine by the CBN, the Attorney General of the Federation (AGF) also directed the same MTN to pay its tax areas to the tune of $2 billion within the same period.

But MTN had denied in strong terms of any wrong doing from both directives given by the CBN and the Attorney General.
However, the central bank filed a counter-claim last week to a court request by MTN, which is seeking to stop the bank from forcing it to bring back the money, according to MTN’s lawyer.

Speaking on the Attorney General’s ‘demand notice for historical tax obligations, MTN Corporate Relations Executive, Mr. Tobe Okigbo said: “MTN has conducted a detailed review of these claims, and provided evidence of tax remittance to the Attorney General’s office. The Attorney General’s notice indicates that he is rejecting this evidence. We believe that all taxes due to the Nigerian government have been paid and these allegations have not been raised by any of the revenue generating agencies that MTN engages with regularly, and from whom MTN has received numerous awards for compliance.”

But in spite of the denial of any wrong doing, the Nigeria Labour Congress (NLC), had called on MTN Nigeria to comply without further delay, the directives of the federal government on the refund of repatriated funds and unpaid tax arrears, totaling $10.134 billion.
President of NLC, Ayuba Wabba, who made the call, said MTN Nigeria had been operating with impunity in Nigeria, in spite of the fact that 60 per cent of its global income comes from Nigeria.