A report on Thursday evening that Nigeria is playing hardball with MTN Group sent the wireless carrier’s shares tumbling more than 10% shortly after markets opened in Johannesburg on Friday.
The shares tumbled to as low as R78 apiece after Bloomberg reported that Nigeria’s central bank had argued in court papers that MTN should not be given an injunction that would stop the operator from having to transfer US$8.1-billion back to the West African country. They later recovered some ground, closing down 4%.
MTN should pay 15% annualised interest on the amount claimed until the courts make a judgment on the matter, and 10% from then until the whole amount is paid, the central bank told the court.
The Bank alleged in late August that MTN and four of its banks — Standard Chartered, Citigroup, Stanbic IBTC and Diamond Bank — illegally repatriated the money from Nigeria. MTN sought an injunction in early September to buy itself time and fight the claim in its biggest market, which wiped as much as 36% off its market value.
The transfers “may have been premeditated and contrived as a scam to make and maximise profits, defraud the Federal Republic of Nigeria and to enjoy unlimited foreign exchange income perpetually from a single investment without complying with the foreign exchange laws and regulations of Nigeria,” the central bank said in the documents.
MTN Group shares had risen in recent weeks on optimism that the dispute would be settled amicably. — Reported by TechCentral and Bloomberg LP
