MTN has decided to take the legal route to challenge a US$3,9bn (R60bn) fine imposed on it by the Nigerian Communications Commission.
This is after it exhausted all other options to have the fine reduced, it said in a statement to shareholders on the JSE’s stock exchange news service late on Thursday afternoon.
“All factors having a bearing on the matter have been thoroughly and carefully considered, including a review of the circumstances leading to the fine and the subsequent letters received from the NCC,” MTN said.
“MTN Nigeria, acting on legal advice, has resolved that the manner of the imposition of the fine and the quantum thereof is not in accordance with the NCC’s powers under the Nigerian Communications Act and therefore there are valid grounds upon which to challenge the fine,” it added.
MTN has now instructed its lawyers to proceed with legal action in the federal high court in Lagos to seek the “appropriate relief”.
“MTN is advised that in the current circumstances, in line with the lis pendens rule (pending legal action), the parties are enjoined to restrain from taking further action until the matter is finally determined,” the group said in the statement. “This is consistent with previous judicial decisions in Nigeria.”
The NCC had given MTN until 31 December to pay the fine in full, or face the consequences.
“Notwithstanding this action, the company will continue to engage with the Nigerian authorities to try and ensure an amicable resolution in the best interests of the company, its stakeholders and the Nigerian authorities.”
Although the NCC agreed earlier this month to reduce the fine from $5,2bn to $3,9bn, MTN has made little further headway in negotiations after the company failed to cut off more than 5m unregistered Sim cards under the West African nation’s Sim card registration law.
The fine, even at the reduced level, is by many orders of magnitude the largest fine ever imposed on a telecommunications operator by a regulator anywhere in the world.
Nigeria is MTN’s biggest and most profitable market. It has more than 62m customers in the West African nation.
The fine has already cost MTN’s group CEO, Sifiso Dabengwa, his job. CEO of MTN Nigeria Michael Ikpoki has also resigned.
Former MTN group CEO Phuthuma Nhleko has agreed to act as executive chairman — assuming CEO responsibilities — until a replacement can be found.
Nhleko recently appointed Jyoti Desai as group chief operating officer, a position that fell away when Dabengwa, who had held the role, was appointed as CEO in 2011. — (c) 2015 NewsCentral Media