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$2.1bn saga: Solution in sight for MTN

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MTN long running battles with the Central Bank of Nigeria (CBN) and office of the Attorney General of the Federation (AGF) may be close to resolution.

The telecoms giant, the apex bank, and four commercial banks are scheduled to meet between this Friday and Monday next week.

The CBN in August this year fined four banks a total of ₦5.86 billion for breaching Nigeria’s extant laws and forex rules when they facilitated illegal repatriation of funds to South Africa on behalf of MTN.

Standard Chartered was fined N2.4 billion, Stanbic IBTC N1.8 billion, Citibank N1.8 billion and Diamond Bank N250 million.

The apex also instructed MTN to return $8.1 billion. Shortly after, the Attorney General then slammed the company with a $2 billion tax bill.

The company denied any wrongdoing, and has stated its commitment to continue operations in Nigeria. MTN then took the CBN and AGF to court to restrain the parties from collecting the respective sums.

The tussle has frightened foreign investors in the country, and briefly heightened foreign exchange outflows. The CBN was forced to issue a statement allaying rumors it would retroactively implement foreign exchange laws.

Minister of Finance, Zainab Ahmed during the 24th Nigerian Economic Summit held in October admitted the saga had been damaging  and there would be no company after MTN.

The South African Reserve Bank (SARB) this week claimed the dispute could potentially destabilise the country’s financial system, as it would affect MTN’s ability to meet obligations to South African banks.

MTN shareholders, also suffered as the company’s shares took a severe pounding.

The issues may have delayed a planned listing and Initial Public Offer on the Nigerian Stock Exchange (NSE).

 

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