Liberia’s Central Bank Sanctions MTN Mobile Money

*Fines telco for flouting regulations

The Central Bank of Liberia, CBL, has wielded the big stick on Lonestar Cell MTN Mobile, Liberia’s largest mobile money company and subsidiary of the South Africa’s telecommunications behemoth, MTN.

The Country’s financial regulator found the mobile money company guilty of several regulatory infractions and imposed on it (mtn)  a fine of millions of Liberia’s dollars.

In a letter addressed to Mr Rahul De,  the Managing Director of the company, CBL noted that the company was being fined because of “continuous violations of CBL’s mobile money regulations and failure to conform to the minimum corporate governance requirements by the CBL.”

In response to the fine and directives, the CEO wrote to the CBL and appealed that the fine be waived.  In another letter, CBL rejected the appeal and reaffirmed its directives that the fine be paid immediately and that the company should bring itself into compliance with the CBL regulations.  

The CBL further stated that since MTN Mobile Money became operational, it had been in continuous violation of the CBL regulations.

While sources close to CBL confirmed that the fine had now been paid, it was revealed that the company had still not yet complied with the CBL regulations.  In the second letter by the regulator,  the CBL has warned MTN Mobile Money that further failure to comply with the timelines given by the regulator could result in the imposition of additional penalties.

In a related development, the local Liberian shareholders of MTN Mobile Money have sued the company in the Commercial Court of Liberia for non-compliance with their rights as shareholders.  

Rcall that the South African telecommunications giant corporate conduct had in the past come under the hammer regulatory bodies in some of the African countries where it operates.

In Nigeria, for example, the company was fined billions of US dollars in recent years.  In October 2015, the regulator slammed MTN with a fine of N1. 04 trillion naira, equivalent to $5.2 billion US dollars at the exchange rate prevailing at the time, following their failure to cut off five million unregistered subscribers after a deadline set by NCC, in agreement with major telcos in the country.

In 2017 in Benin Republic, MTN’s  refusal to pay the regulatory fees due to the Government of Benin resulted in the expulsion of the MTN Benin CEO, Stephen Blewitt (now CEO of MTN Ghana) from that country.

Similarly, in January of this year, Guinea’s Post and Telecommunications Regulatory Authority (ARPT) shut down MTN’s headquarters in Conakry.  According to local media reports, the Guinean regulator accused the mobile operator of non-payment of taxes, fees and license fees. 

The Pan-African telecommunications giant has been accused of having a reputation for bullying and marginalization of local shareholders in various countries where they operate.  These local shareholders are now fighting back, through various litigations and appeals to regulatory authorities for redress and protection.  In Benin in recent years, a local shareholder had his rights allegedly trampled over so consistently that he had to bring a lawsuit against MTN in the British High Courts.   

In Cameroons, MTN has been accused of unwillingness to pay regulatory fees to the Governments under whose licenses it operates, and also accused of the same attitude towards local contractors and professionals.