MTN shares plummet as CBN hammer shakes markets

Shares of MTN Nigeria fell by a whopping 18% as the market opened on Thursday. The company is on the hook to refund a whopping $8.1 billion to the CBN following an accusation of illegal repatriation of funds.

Recall that the Central Bank of Nigeria (CBN) on Wednesday fined Citibank, Diamond Bank, Stanbic IBTC Nigeria and Standard Chartered Bank a total of N5.86 billion for allegedly breaching Nigeria’s extant laws and forex rules when they facilitated illegal repatriation of funds to South Africa on behalf of MTN.

The Apex bank also requested that they refund the sum of $8,134,312,397.63 which “was illegally repatriated on behalf of MTN by the aforementioned banks between 2007 and 2015.

Meanwhile MTN in a statement on Thursday said all dividends it paid to its shareholders between 2007 and 2015 were approved by the Central Bank of Nigeria (CBN).

The telco was reacting to the claim by the CBN that it illegally converted shareholder loans to preference share and repatriated $8.1 billion as dividends during the period under scrutiny.

“MTN Nigeria strongly refutes these allegations and claims. No dividends have been declared or paid by MTN Nigeria other than pursuant to CCIs issued by our bankers and with the approval of the CBN as required by law,” the statement said.

It promised to “engage with the relevant authorities and vigorously defend our position on this matter and provide further information when available”.

Commenting on the sanction in a statement released on Thursday, MTN said the sanctions damage investor confidence.

“The re-emergence of these issues is regrettable as it damages investor confidence and, by extension, inhibits the growth and development of the Nigerian economy,” it said.

In 2015, the Nigerian government fined MTN N1 trillion for failing to deactivate unregistered lines, but the penalty was negotiated down to N330 billion out of which Abubakar Malami, the Attorney-General of the federation, said his ministry paid N500 million to lawyers for helping with negotiations.