MTN to seek relief Over U.S.$10.1 Billion Nigeria Sanctions

Sep 11, 2018

MTN Group announced that MTN Nigeria has applied to the Federal High Court of Nigeria for injunctive relief from the Central Bank of Nigeria (CBN) and the Attorney General of the Nigerian Federation (AGF)’s orders. As previously disclosed, the CBN has alleged improper dividend repatriations by MTN Nigeria and requested that $8,1 billion be returned “to the coffers of the CBN”.

At the same time, the AGF has alleged unpaid taxes on foreign payments and imports, and has demanded that approximately $2,0 billion in relation to these taxes be paid to the Federal Government of Nigeria (and now directed that the payment of the $8.1 billion is dealt with through his office rather than as directed by the CBN). MTN Nigeria strongly denies these allegations and claims.

The aim of MTN’s application to the High Court is to protect MTN Nigeria's assets and shareholder rights within the confines of Nigerian law while the company continues to engage with the relevant authorities.

MTN Group President and CEO Rob Shuter said “We believe that we have complied with all relevant laws, and in light of that, and the conflicting instructions from different organs of State, we have had no choice but to seek relief from the Courts in Nigeria. We remain firmly committed to the Nigerian market and will continue to engage with the authorities on these matters.”

A fortnight ago, the CBN announced it wrote the firm to refund about $8.134 billion (about N2.5trillion at N306.15 to $) repatriated illegally out of Nigeria.

On the other hand, the AGF had a few days after the CBN sanctions also accused MTN of not paying taxes on foreign payments and imports totaling about $2 billion to the Federal Government.

CBN's spokesperson, Isaac Okorafor, said the repatriation was facilitated by four commercial banks using irregular Certificates of Capital Importation (CCIs) issued on behalf of some offshore investors of MTN Nigeria.

The four banks, Standard Chartered Bank, Stanbic-IBTC, Citibank and Diamond Bank, were also asked to refund various amounts totaling N5.87 billion.

The amounts, which have since been deducted from the banks' accounts with the CBN, include N2.5 billion for Standard Chartered; Stanbic IBTC (N1.9 billion); Citibank (N1.3 billion and Diamond Bank (N250 million).

The CBN accused the banks of violating the country's laws, including the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 and the Foreign Exchange Manual, 2006.

MTN, which described the allegation as regrettable, rejected both sanctions, promised to vigorously defend its position that it did not do anything illegal an unlawful.

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