MTN Group has hit out at the Central Bank of Nigeria after it emerged on Wednesday that the South African-headquartered telecommunications operator and several banks face a demand to refund more than US$8-billion allegedly illegally expatriated from the country over an eight-year period.
MTN confirmed in a statement to shareholders before markets opened in Johannesburg on Thursday that it received a letter from the Nigerian central bank alleging that certificates of capital importation issued in respect of the conversion of shareholder loans in MTN Nigeria to preference shares in 2007 had been improperly issued.
“As a consequence, they claim that historic dividends repatriated by MTN Nigeria between 2007 and 2015 amounting to $8.1-billion need to be refunded to the Central Bank of Nigeria,” MTN said. “MTN Nigeria strongly refutes these allegations and claims.”
It said no dividends have been declared or paid by MTN Nigeria other than pursuant to capital importation certificates issued by its bankers and with the approval of the central bank as required by law. “The issues surrounding the (certificates) have already been the subject of a thorough inquiry by the senate of Nigeria.”
In September 2016, Nigerian lawmakers conducted a “holistic investigation” into MTN and other companies. A November 2017 report concluded that MTN Nigeria “did not collude to contravene the foreign exchange laws and there were no negative recommendations made against MTN Nigeria”, the group said.
“MTN Nigeria, as a law-abiding citizen, is committed to good governance and to abiding by the extant laws of the Federal Republic of Nigeria. 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.”
Bloomberg reported on Wednesday that MTN, along with Citigroup and Standard Chartered, had been asked to refund the more than $8-billion in question. The central bank also included Nigeria’s Stanbic IBTC Holdings and Diamond Bank in the charge, which comes almost two years after Johannesburg-based MTN was first accused of the misdemeanour.
MTN has had a torrid time in Nigeria, its biggest market, in recent years. It was previously fined $1-billion for failing to disconnect unregistered Sim cards to meet a regulatory deadline.
The group vowed to defend its position regarding the central bank’s claim “vigorously”. — © 2018 NewsCentral Media