MTN throws R3,8bn at Nigeria problem - TechCentral

MTN throws R3,8bn at Nigeria problem

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MTN’s share price climbed in intraday trading on Wednesday after announcing it had made a 50bn naira (US$250m; R3,8bn) payment to Nigerian authorities and withdrawn its legal action in the federal high court in Nigeria.

MTN’s shares jumped to a session high of R1312 after alerting shareholders about the decision in a statement issued via the JSE’s stock exchange news service.

The company’s Nigerian subsidiary was fined a record-setting $5,2bn (later reduced to $3,9bn) for failing to disconnect more than 5m unregistered Sim cards under the West African nation’s tough Sim card registration law.

“Shareholders were advised on 22 January 2016 that the above-mentioned matter came up for hearing before the federal high court in Lagos, Nigeria when the judge adjourned the matter to 18 March 2016 in order to enable the parties to try and settle the matter,” MTN said in the statement.

“Pursuant to the ongoing engagement with the Nigerian authorities, MTN Nigeria has today made an agreed, without prejudice, good faith payment of 50bn naira to the federal government of Nigeria on the basis that this will be applied towards a settlement, where one is eventually, hopefully arrived at,” it said.

MTN's share price in intraday trading on Wednesday - image c/o Google Finance

MTN’s share price in intraday trading on Wednesday – image c/o Google Finance

“In an effort to achieve an amicable settlement, MTN has agreed to withdraw the matter from the federal high court in Lagos.”

MTN said its executive chairman, Phuthuma Nhleko, who is also a director of MTN Nigeria, is “continuing to lead the team engaging the Nigerian authorities with a view to settling the matter”.

MTN is due to report its 2015 financial results on 3 March.  — (c) 2016 NewsCentral Media

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2 Comments

  1. 5% of the original fine. (and 6.5% of the discounted fine)

    I (and anyone that had the same opinion) picked up quite a bit of flak from some of the posters for suggesting that the fine was excessive and MTN were correct to argue this fine. I think people let their anger toward MTN get in the way of their objectivity.

    Of course there may be more to come..

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