MTN Group Ltd. and its bankers have provided more documents that may reduce Nigeria’s $8.1 billion claim on the South African wireless carrier, which could be resolved soon, Central Bank of Nigeria Governor Godwin Emefiele said.

The central bank alleged in late August that MTN and four banks -- Standard Chartered Plc, Citigroup Inc., Stanbic IBTC Plc and Diamond Bank Plc -- illegally repatriated money from Nigeria and that the company should return $8.1 billion. The local regulator also fined the four banks a combined $16 million.

Speaking to reporters in London on Sunday, Emefiele said he expected that the new information would help cut the size of the claim and that the matter would be resolved “amicably.”

“I don’t think it will be at $8.1 billion having provided documents,” Emefiele said, adding his staff is studying the documents and he hoped to make a decision on the matter in a “couple of weeks.”

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 percent off its market value within two weeks.

‘Amicable’ Resolution
The central bank has asked the Federal High Court in Lagos to deny MTN’s request and said the company should pay an annualized 15 percent interest on the dividends until the matter is ruled upon, and then 10 percent until the whole sum is paid, according to legal documents filed by the regulator.

“They will see they have been given a fair hearing,’’ Emefiele said. “More information has been provided and I’m very optimistic that matters are going to be resolved amicably.’’

Emefiele said the clash with MTN had taken a “global dimension” that it didn’t need to and that he was keen to demonstrate to international investors how open the Nigerian market is, calling the MTN matter “isolated’’ and no reason “for anyone to lose any sleep.’’

“This is not a matter that should have blown so openly,’’ he said. “Nigeria is a country that happens to be very, very open.’’

MTN Chief Financial Officer Ralph Mupita said earlier this month the spat in Nigeria may cause the carrier to reconsider raising cash through an initial public offering of its local unit in Lagos. Instead, MTN may list the business by way of introduction, which places existing securities on the exchange.

 

- Bloomberg

The Central Bank of Nigeria (CBN) has asked the Federal High Court sitting in Lagos to deny MTN Group an injunction that would stop the telecommunication company from transferring $8.1 billion back to Nigeria, even as it seeks to charge the firm 15 percent interest on the sum.
 
The CBN had in late August alleged that MTN repatriated a total of $8.1 billion from the country through illegal means. It directed the telco to refund the money and imposed a fine of N5.87 billion on four banks – Standard Chartered Plc, Citigroup Inc., Stanbic IBTC Plc and Diamond Bank Plc – that allegedly aided the process.
 
The apex bank, in a statement last month, said it was reviewing new information provided by MTN and the four banks with a view to arriving at an “equitable resolution.”
 
This came after the telco dragged the CBN and the Attorney-General of the Federation, Abubakar Malami, to court seeking an order restraining both parties from demanding the $8.1 billion and another $2 billion in tax arrears.
 
But in documents filed with the Federal High Court in Lagos by the CBN and seen by Bloomberg on Thursday, the financial regulator argued that MTN should pay 15 percent annualised interest on the sum until the courts make a judgment, and 10 percent from then until the whole amount is paid.
 
The transfers “may have been premeditated and contrived as a scam to make and maximize 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 CBN said in the documents.
 
With the court fillings, it appears the CBN is not prepared to back down over its allegations on the telco even as CBN Governor, Godwin Emefiele, said after a monetary policy committee meeting last week that the dispute would soon be resolved and that “everyone will be happy.”
 
MTN’s shares on the Johannesburg Stock Exchange (JSE) had plunged to the lowest level in nine years over the $10.1 billion claims. The shares further dropped for the first time in five days on Thursday by 2.5 percent to close at 87.30 rand, extending their fall since CBN made its accusations to 19 percent.
 
Ripples Nigeria reports that MTN’s Chief Financial Officer, Ralph Mupita, said the company may no longer seek to raise capital to finance its operations through an Initial Public Offering (IPO) on the Nigerian Stock Exchange (NSE) due to the crisis.
 
IPO is the offering of stock to the public – stock market – for the first time by a private company planning to raise investment capital.
 
Mupita had however said the company would rather consider other options of trading its shares on Nigeria’s stock market, including listing by introduction in which existing shares are listed.
 
The listing of the business on NSE was part of the settlement for a $5.2 billion (N1 trillion) fine placed on it by the Nigerian Communications Commission (NCC) for violating SIM card registration regulations in 2015 which it later negotiated down to about $1 billion.
 
 
Source: The Ripples
 
Operations through an Initial Public Offering (IPO) on the Nigerian Stock Exchange (NSE).
 
IPO is the offering of stock to the public – stock market – for the first time by a private company planning to raise investment capital.
 
The development is coming against the backdrop of the recent $10.13 billion allegations of illegal repatriation of funds and tax evasion against it by the Central Bank of Nigeria (CBN) and the Office of the Attorney-General of the Federation (AGF).
 
The telecommunication company is considering other options of trading its shares on the Nigeria’s stock market, including a so-called listing by introduction, in which existing shares are listed, MTN’s Chief Financial Officer, Ralph Mupita, told Bloomberg in a recent interview in Johannesburg.
 
According to him, the board of the company would still need to make a final decision on the matter.
 
“The IPO type of listing has become challenging under current market conditions,” Mupita said.
 
“We are exploring other options. The Nigerian business would not get fair value under current market conditions. The simplest way to go forward would be an introduction on the Nigerian Stock Exchange.”
 
Mupita said the telco could complete the listing in Nigeria, its biggest market, by the end of this year or first quarter of next year.
 
MTN’s stock on the Johannesburg Stock Exchange (JSE) had plunged to the lowest level in nine years over a directive by the apex bank to refund a sum of $8.13 billion it allegedly repatriated through illegal means and a $2 billion in tax arrears the Federal Government demanded through the AGF’s office.
 
The listing of the business on NSE forms part of a settlement for a $5.2 billion (N1 trillion) fine placed on it by the Nigerian Communications Commission (NCC) for violating SIM card registration regulations in 2015 which it later negotiated down to about $1 billion.
 
“We have sought legal protection for our Nigerian business and a judge has been appointed for upcoming hearings,” Mupita said.
 
The CBN last week said it was reviewing new information provided by MTN and four banks that allegedly aided the repatriation process with a view to arriving at an equitable resolution.
 
 
Source: The Ripples

MTN Group Ltd., the wireless carrier facing a combined $10 billion in claims from authorities in Nigeria, said it may no longer seek to raise capital through an initial public offering on the country’s stock exchange.

Africa’s largest mobile carrier is reconsidering the IPO amid a dispute with authorities in its biggest market that wiped more than a third off the company’s market value over three weeks. MTN pledged to list the shares after being fined $1 billion for not disconnecting SIM cards two years ago.

MTN is looking at other ways to trade the stock in Lagos, including a so-called introduction, in which existing shares are listed, Chief Financial Officer Ralph Mupita said in an interview in Johannesburg. MTN’s board still needs to make a final decision, he said. MTN’s Nigerian shares already trade over the counter.

“The IPO type of listing has become challenging under current market conditions,” Mupita said. “We are exploring other options. The Nigerian business would not get fair value under current market conditions.” A listing by introduction is the simplest way forward, he said.

MTN could complete the listing by the end of this year or first quarter of 2019, the CFO said. Despite the dispute with the central bank over the repatriation of $8.1 billion out of Nigeria and a separate tussle over $2 billion in back taxes, MTN is committed to a listing, said Mupita.

“We have sought legal protection for our Nigerian business and a judge has been appointed for upcoming hearings,” Mupita said. The central bank last week said it is considering new information provided by MTN and four banks into the outflows and that it expects to resolve the matter soon.

MTN’s shares pared an earlier gain of as much as 3.7 percent to close 2.1 percent higher at 89.40 rand in Johannesburg on Monday. In the weeks after Nigerian authorities challenged the transfer of funds, MTN plunged 35 percent, but the stock has since recovered about half of that drop. “That cost our shareholders $5.5 billion,” said Mupita. MTN’s investor base is about 44 percent South African. Other major shareholders are based in the U.S., the U.K., Europe and the Middle East.

MTN still sees a great business case for Nigeria, Africa’s most populous nation, with less than a third of users currently on the internet, Mupita said.

“We are engaging with authorities and investors and hope to reach a speedy resolution on the matter, to deal with the overhang on our share and the concerns of shareholders about Nigeria’s investment climate for foreign companies,” Mupita said.

Nigerian authorities have come under criticism following an impasse with MTN and lenders including Citigroup Inc., Standard Chartered Plc, Standard Bank Group Ltd. and Lagos-based Diamond Bank Plc that threatened to spook investors.

“Investors are getting very nervous and the last thing Nigeria needs is for investors to be nervous," said Bismarck Rewane, chief executive officer of Financial Derivatives Co., speaking from Lagos. The government should resolve the issue with MTN “as quickly as possible.”

 

Credit: Bloomberg

The Nigerian Communications Commission (NCC), says its awareness campaigns against the menace of pre-registered SIM cards, which has been a recurring trend in the country’s telecom sector is yielding results.

Mr Salisu Abdu, the Head, Enforcement Unit of the commission, made this known in a statement in Lagos on Sunday.

Abdu said that the commission had carried out a three-day comprehensive enforcement in some major markets in Lagos to fish out perpetrators of pre-registered SIM card.

He said that the latest enforcement exercise was largely informed by a report from the office of the National Security Adviser about the prevalence of pre-registered SIM cards at some locations in Lagos.

He said that the adviser however expressed some measure of satisfaction that the trend seemed to be on a downward trend when compared with what obtained few years ago.

“We visited computer village, some markets in Ikorodu and we also visited one in Bariga with the objective of identifying where the sale of pre-registered SIM cards is ongoing.

“Fortunately enough, it was only in computer village we were able to buy only one Airtel SIM card from a mobile agent.

“We appreciate the level of compliance in Lagos; it apparently means that there is adequate awareness campaign that people are now aware that the sale and buying of pre-registered SIM card is criminal,” he said.

Abdu said that the commission had addressed the media on the outcome of the outing at the Lagos Command of the Nigeria Security and Civil Defence Corps (NSCDC), where some of the apprehended suspects were taken for interrogation.

“We went to two locations, Alaba International market and Orile market along Badagry expressway.

“At Alaba market, we purchased a pre-registered SIM card from an agent, a Globacom agent and in Orile we found pre-registered SIM cards on a market woman who, in fact, was seated with a lot of SIM cards being sold to members of the public.

“It is those same cards that criminals are using to commit a lot of crime and you can now understand why it had sometimes been difficult for security operatives in the course of their investigations of criminal offences to identify people who have actually committed such crimes,” Abdu said.

The enforcement official said that the last day of the raid of phone markets in Lagos was concentrated largely on the Saka Tinubu market in Victoria Island where two more persons who were found selling pre-registered SIM cards and were picked up by the combined team of NSCDC and NCC officials.

While speaking on the commission’s next line of action, Abdu said that investigations would first be carried out by the NSCDC, which accompanied the enforcement team during the exercise.

“We have to get to the root as to where they are getting the pre-registered SIM cards and I am sure the old woman and some of the persons arrested are not the ones doing the registration, there must be somebody who is supplying the SIM cards to them.

“We will need to find out the people who are behind it and we believe some of these challenges are coming from registration agents.

“So, we have been trying as much as possible to warn network operators to ensure that they checkmate their registration agents.

” We will also look into all the SIM cards we recovered in this exercise and ensure that we communicate necessary sanction to the mobile operators,” he said.

Abdu recalled that in 2017, the Executive Vice Chairman, NCC, Prof. Umar Garba Danbatta hosted a stakeholders’ meeting with telecom network providers at the commission’s headquarters in Abuja where he expressed displeasure at the persistence of improperly registered and pre-registered SIM cards.

Abdu said that the commission had subsequently launched a nationwide television commercial in major national television and local television networks in all the states of the federation in March to sensitise telecom subscribers on the dangers of pre-registered SIM cards.

 

Source: PMNEWSNIGERIA

The Central Bank of Nigeria (CBN) said it was reviewing the information provided by Nigeria’s telecommunication giant, MTN Nigeria, and four banks it recently sanctioned over illegal repatriation of funds.
 
The CBN disclosed in a statement by its Director of Corporate Communications, Isaac Okoroafor.
 
Recall that the CBN had on August 29 sanctioned MTN Nigeria and four banks – Standard Chartered Bank, Stanbic-IBTC, Citibank, and Diamond Bank – for allegedly issuing irregular Certificates of Capital Importation (CCIs) on behalf of some offshore investors of MTN.
 
The CBN had ordered MTN to refund a sum of $8.13 billion it repatriated, while the four banks were slammed a total of N5.87 billion, which it later deducted from their accounts.
 
The apex sanctioned Standard Chartered Bank the highest fine of N2.4 billion, while Stanbic IBTC Nigeria received a fine of N1.88 billion. Citibank Nigeria was ordered to pay a sum of N1.2 billion and Diamond Bank was penalized in the sum of N250 million for violating extant rules.
 
However, the telecommunication company and the four banks in separate statements denied wrongdoing.
 
But according to the statement by the CBN, it was engaging and reviewing additional information provided by the four banks owing to concerns raised over the sanctions it imposed on the banks.
 
“The recent sanctions on the banks arose due to irregularities with respect to repatriations made on behalf of MTN Nigeria Limited and were not in any way designed to restrict access to investor returns.
 
“In response to the recent regulatory actions, the Banks and MTN are engaging the CBN and have provided additional information which is currently being reviewed with a view to arriving at an equitable resolution,” it stated.
 
CBN assured all investors that the integrity of the CCI regime remains sacrosanct and there shall be no retroactive application of foreign exchange rules and regulations.
 
It also added that “some of our recent innovations and reforms of the Foreign Exchange regime such as the introduction of the NAFEX window, are designed to simplify foreign exchange regulations.
 
“Furthermore, the delegation of the issuance of CCIs to commercial and merchant banks some years ago was done to instill confidence in the investor community and encourage the flow of foreign direct and portfolio investments into the Nigerian economy.”
 
 
Vanguard

Following $10.13 billion allegations of illegal repatriation of funds and tax evasion against MTN Nigeria, the Nigeria Labour Congress (NLC) has urged the Economic and Financial Crimes Commission (EFCC), the Department of State Services (DSS) and other relevant security agencies to probe the operations of the company.

In a statement in Abuja on Sunday, the NLC President, Ayuba Wabba, said the Federal Government should spare no effort in recovering the money as anything to the contrary would send wrong signals to other corporate organisations it had punished for lesser tax infractions.

Recall that the Central Bank of Nigeria (CBN) had alleged that MTN repatriated $8.13 billion using irregular certificates of capital importation (CCIs), while the Federal Government through the Attorney General of the Federation, Abubakar Malami, demanded for the payment of $2 billion in tax arrears.

According to Wabba, the allegations have vindicated the NLC as it had earlier highlighted alleged labour laws, local content law and security breaches by the telecommunications company.

The statement quoted the NLC President as saying, “We at the NLC hereby urge MTN Nigeria to comply without further delay with the directive of the Federal Government to pay $2bn in tax arrears as well as the $8.13bn it was said to have illegally repatriated to South Africa over which four indigenous banks have been fined.

“Coupled with the demand that MTN should obey our national laws by allowing unionisation, we urge critical government agencies such as the Nigerian Communication Commission, the EFCC, the Department of State Services, Nigeria Immigration Service and the CBN to closely look into the operations of the company, especially in the light of the Thabo Mbeki report.

“On our part, we are, however, not surprised by the unethical conduct of MTN. They are not only engaged in the exploitation of Nigerian workers and turning them into slaves, but have extended their frontiers to unwholesome economic exploitation and sabotage.”

The NLC also called on the government to use the opportunity to send appropriate message to everyone, especially corporate organisations that often paid taxes in the breach.

MTN Nigeria has dragged the Central Bank of Nigeria (CBN) and the Attorney-General of the Federation to court to seek relief over a $10.1 billion demand.

In a statement on Monday, the telecommunication company said it was seeking a restraining order from a Federal High Court of Nigeria to protect its assets and shareholder rights.

”In order to protect MTN Nigeria’s assets and shareholder rights within the confines of the law, we have applied today in the Federal High Court of Nigeria for injunctive relief restraining the CBN and the AGF from taking further action in respect of their orders,” the statement read.

The telco, however, did not mention the Court at which it filed the suit, it simply said, ”MTN Nigeria seeks relief from the Nigeria High Court against the Central Bank of Nigeria and the Attorney General of the Federation.”

Last month, the CBN had ordered MTN Nigeria to refund $8.1 billion shareholders’ dividends it allegedly repatriated illegally to its coffers, while it imposed sanctions totaling N5.87 billion on four banks that aided the company in the repatriation.

Last week, the Auditor-General of the Federation, Abubakar Malami, in a statement ordered the telco to refund another $2 billion tax arrears it failed to pay.

He said his office made a “high-level calculation” which showed that MTN should have paid about $2 billion in taxes.

The taxes, according to the AGF, were relating to the importation of foreign equipment, payments to foreign suppliers since 2008, import duties, VAT and withholding taxes on foreign imports/payments.

 

The Ripples

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.

The Nigerian government has slammed South African telecoms giant, MTN Group, with a $2 billion tax demand.

The new tax bill incurred by the telecom firm over the last decade comes amid controversies generated by the government’s directive to MTN to hand over $8.1 billion it accused the firm of illegally sending abroad with the collusion of four banks.

MTN said it had been in talks with Nigeria’s Attorney-General, Abubakar Malami, over concerns around tax compliance; but it was billed all the same.

The company in a statement said it was billed for importation of foreign equipment and payments to foreign suppliers, all spread across a period of about ten years.

“In this process, his (the Attorney-General’s) office made a high-level calculation that MTN Nigeria should have paid approximately $2.0 billion in taxes relating to the importation of foreign equipment and payments to foreign suppliers over the last 10 years,” MTN said.

The firm added, however, that its total payment of around $700 million over the 10-year period fully settled the amount owed under the taxes in question.

Reuters reports Tuesday that shares in the telecom firm dropped 5.6 per cent to 81.95 rand as at noon, bringing losses since last week to nearly 25 per cent. Last Thursday, the telecom firm was issued $8.1 billion demand over concerns around repatriation of funds.

The latest demands come two years after Africa’s biggest telecoms company agreed to pay more than $1 billion to end a dispute with Nigeria over unregistered SIM cards. 

MTN, in its reaction, described the latest demands by Nigerian authorities as “regrettable and disconcerting”.

The company said it will “continue to engage with the relevant authorities on all these matters, and we remain resolute that MTN Nigeria has not committed any offences and will vigorously defend its position.”

 

- Reuters

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