Banks and Telecommunications operators in Nigeria, Tuesday, traded blames over the rising cases of financial frauds perpetrated in the country through telecommunications networks.
 
The financial services providers and telecommunications companies tackled each other on who to bear the blame on financial frauds committed on bank customers’ accounts using telecommunications network at a stakeholder meeting on financial fraud using telecoms platform convened by the Nigerian Communications Commission (NCC).
 
There were also heated arguments on whether victims of such financial frauds should be classified as bank customers or that of the telecommunications companies.
 
Another subject of heated argument was who should bear the responsibility for the building of technology infrastructure that would help to detect when a wrong subscriber that had swapped a SIM initiated a financial transaction through the networks.
 
While telecommunications operators alleged that banks wanted the technology solution to be given to them free, the banks contended that their services provided a flow of income to telecommunications operators.
 
The Central Bank of Nigeria (CBN) and the Consumer Protection Council (CPC) however intervened to establish that the subscribers were bank customers even when they used technology platforms to carry out transactions.
 
The Executive Vice Chairman, Nigerian Communications Commission, Prof. Umar Danbatta, in his address to the forum, said the commission was collaborating with the CBN, the Nigeria police and other relevant agencies in the fight against e-banking fraudsters.
 
He said: “This important forum is taking place at a time when the level of financial fraud has reached N12.5bn. So, something needs to be done urgently to secure the confidence of Nigerians in the financial system as well as a communications system in the country.
 
“Despite advances in software technology, human intervention is still required to prevent SIM swap fraud, which is quite difficult to detect. Also, controls and processes by network operators have to a degree failed and led to instances of human error in retail branches in distributing SIM cards.”
 
Also speaking at the event, the Minister of Communications, Mr Adebayo Shittu, noted that the incidence of financial fraud using telecoms platforms had been pervasive.
 
Shittu said: “We believe innovation needs to be meaningful to ensure that nations and societies everywhere benefit from technological advancement. Technology disruption has been infused in every facet of the Nigerian economy.
 
“The impact of online fraud cannot be underestimated or denied. Indeed, it leads to the loss of reputation and income and it is tied to direct financial loss of billions of naira in the financial sector, e-commerce and telecommunications.
 
“The frequency of identity theft is alarming and this is why the government is putting its full might behind efforts to confront this menace and to put an end to it.”
 
 
Source: Business Insider
The Federal High Court Sitting in Lagos has entered as judgement the settlement terms in a suit filed by MTN Nigeria Communications Limited against the Federal Government.
 
MTN had challenged the $8,134,312,397.63 demanded from it by the Central Bank of Nigeria (CBN) over alleged forex remittance infractions.
 
In the suit, the telecoms firm asked the court to restrain the CBN and the Attorney-General of the Federation (AGF) from imposing punitive sanctions on it.
 
On the other hand, the apex bank had accused MTN Nigeria of improper dividend repatriations and demanded that $8.1 billion be returned “to the coffers of the CBN”.
 
When the case came up in court on Thursday, MTN’s lead counsel, Wole Olanipekun, informed Justice Saliu Saidu that parties have resolved the dispute amicably.
 
He said the terms of the settlement were filed in on December 28, 2018.
 
CBN’s counsel, Mr Henry Ejiofor, also confirmed to the judge that both parties have settled out of court.
 
He, thereafter, urged the court to enter the terms of settlement as judgment.
 
In his ruling, Justice Saidu thanked the parties for not wasting precious judicial time by going through the rigours of a trial.
 
He adopted the terms of settlement as the judgment of the court and struck out the AGF’s name from the suit.
 
The terms of the settlement were not read in open court and this reporter was unable to get a copy of the document as at the time of this report.
 
However, we will keep you updated as soon as we get the details.
 
The Federal Government had accused MTN of unpaid taxes on foreign payments and imports, asking it to pay approximately $2billion in relation to the taxes.
 
According to the CBN, MTN and four banks deliberately flouted the “laws and regulations … including the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 and the Foreign Exchange Manual, 2006.”
 
The banks allegedly colluded with MTN, using irregular Certificates of Capital Importation (CCI) to illegally remit foreign exchange abroad.
 
The four banks were slammed with a combined N5.87 billion fine.
 
 
 
Source: PmNews
 
MTN had denied the allegations and subsequently filed the suit to challenge it.
MTN Nigeria Communications Limited, and the Central Bank of Nigeria (CBN) have settled their differences over the $8.1 billion demanded by the apex bank, out of court.
 
The telecommunications company disclosed this on Thursday at the resumed sitting of the court in the suit it filed against the CBN.
 
The CBN had demanded that MTN pay the amount following alleged infractions in forex remittances.
 
MTN, through its lawyer, Chief Wole Olanipekun (SAN), had approached the Federal High Court, Lagos, challenging the powers of the CBN and the Attorney General of the Federation to make the monetary demand from it and prayed the court to restrain them from coming after it.
 
The parties to the suit however on December 4, 2018, asked the court for time so that they could settle out of court.
 
Olanipekun, on Thursday informed the court that they have reached an agreement with the CBN. He also presented a document to the court, and said his client had finally reached an agreement with the CBN.
 
He prayed the court to adopt the document as the judgement of the court.
 
Mr Henry Ejiofor, who stood in for CBN’s lead counsel, Mr Seyi Sowemimo (SAN), confirmed the position, while the counsel for the AGF, Olanike Idenu, did not oppose the application by MTN and CBN but urged the court to strike out the name of the AGF from the suit.
 
In his judgement, Justice Saidu thanked the parties for saving the precious time of the court and sparing it the rigours of litigation and consequently struck out the name of the AGF from the suit and adopted the terms agreed upon by the parties as the judgment in the suit.
 
The terms of the agreement and out of court settlement have not been made public.
 
 
Source: The Cable

The Central Bank of Nigeria has announced the resolution of its dispute with MTN Communications Limited, saying the company will now atone only for the illegal remittances on preference shares issued in 2008.

CBN’s spokesman and director of corporate communications announced the breakthrough in a statement published on the bank’s website on Monday.

The MTN also corroborated the truce in a statement simultaneously issued by MTN in Johannesburg.

According to the terms of settlement, the CBN instructed MTN Nigeria to implement a notional reversal of the 2008 private placement of shares in MTN Nigeria at a net cost of circa N19.2 billion – equivalent to US$52.6m (the notional reversal amount).

“This is on the basis that certain certificates of capital importation (CCIs) utilised in the private placement were not properly issued.

“MTN Nigeria and the CBN have agreed that they will resolve the matter on the basis that MTN Nigeria will pay the notional reversal amount without admission of liability”, MTN said.

“In terms of the resolution agreement, the CBN will regularise all the CCIs issued on the investment by shareholders of MTN Nigeria of circa $402,625,419 without regard to any historical disputes relating to those CCIs, thereby bringing to a final resolution all incidental disputes arising from this matter.

The CBN said four months ago that MTN should return to Nigerian coffers $8.1 billion repatriated between 2007 and 2015, because of capital importation certificate irregularities.

Four banks involved in the repatriation, Standard Bank, Stanbic IBTC Nigeria, Citibank Nigeria and Diamond Bank Plc, were fined by the CBN.

Standard Chartered Bank was fined N2.47 billion, Stanbic IBTC, N1.88 billion, Citibank Nigeria, N1.26 billion and Diamond bank, N250 million.

Here is the statement by CBN:

The Central Bank of Nigeria (CBN) in August 2018 directed MTN Communications Limited (MTNN) to reverse repatriations valued at $8.1 billion done on its behalf by four commercial banks between 2007 and 2015 on the basis of Certificates of Capital Importation (CCIs)
irregularly issued to MTNN.

Following the keen interest shown by various stakeholders sequel to the regulatory action, the CBN committed to engage further with MTNN with a view to achieving an equitable resolution.

Consequent upon the above, MTNN, led by its Nigerian shareholders, held intensive engagements with the CBN in the course of which it supplied additional material information, not previously offered to the Bank, satisfactorily clarifying its remittances. Having now reviewed
the additional documentation provided by the company, the CBN has concluded that MTNN is no longer required to reverse the historical dividend payments made to MTN Nigeria shareholders.

However, the CBN identified that the proceeds from the preference shares in MTNN’s private placement remittances of 2008 were irregular having been based on CCIs that were issued without the final approval of CBN.

The CBN and MTNN have mutually agreed that the aforementioned transaction be reversed notionally to bring it into full compliance with foreign exchange laws and regulations.

The parties have resolved that execution of the terms of the agreement will lead to amicable disposal of the pending legal suit between the parties and final resolution of the matter.

The CBN assures foreign investors that the integrity of the CCIs issued by authorised dealers remain sacrosanct. Potential investors are encouraged to take advantage of the enormous investment opportunities that abound within Nigeria.

The telecommunications giant still has another issue to resolve: the court suit over the demand by the attorney general for back taxes.

MTN assured its shareholders that it is also moving towards resolution of this problem.

“Shareholders are advised that the legal process initiated by MTN Nigeria for injunctive relief restraining the AGF from taking further action in respect of its orders for back taxes is continuing.

“The AGF matter came up for initial mention before the Federal High Court of Nigeria Lagos Judicial Division on 8 November 2018 and has been adjourned to 7 February 2019. MTN Nigeria continues to maintain that its tax matters are up to date and no additional payment, as claimed by the AGF, is due, and consequently no provisions or contingent liabilities are being raised in the accounts of MTN Nigeria for the AGF back taxes claim”, the company said.

The attorney-General of the Federation (AGF) is demanding from the company the payment of N242 billion and 1.3 billion dollars, for import duties and withholding tax.


Source: PmNews

* Pays $53 million to settle dispute

* Nigeria is MTN biggest, most lucrative market

* MTN says its tax affairs in Nigeria are up to date (Adds MTN statement, details)

South African telecoms operator MTN Group has agreed to make a $53 million payment to resolve a dispute in Nigeria, it said on Monday, ending a four-month multi-billion dollar dividend repatriation row that has hammered its share price.

Nigeria is MTN's biggest market, accounting for a third of the African telecoms heavyweight's annual core profit, but it has proven problematic for the company in recent years.

The Central Bank of Nigeria (CBN) had ordered MTN and its lenders to bring back a total of $8.1 billion it alleged the company had illegally repatriated using improperly issued paperwork between 2007 and 2008.

"The CBN upon review of the additional documentation concluded that MTN Nigeria is no longer required to reverse the historical dividend payments made to MTN Nigeria shareholders," MTN said in a statement.

However, the central bank has found that a 2008 private placement remittance worth around $1 billion was based on certificates that did not have final approval.

As such, MTN said it had been instructed by CBN to implement "a notional" reversal of that transaction by making a $52.6 million payment.

"MTN Nigeria and the CBN have agreed that they will resolve the matter on the basis that MTN Nigeria will pay the notional reversal amount without admission of liability," MTN said in a statement.

The CBN confirmed the outline of the agreement with MTN, without mentioning the $53 million payment. The agreement would lead to an "amicable disposal of the pending legal suit between the parties and final resolution of the matter," it said in a statement.

MTN and the CBN had filed a claim and counter-claim in a Nigerian court over the dispute. The legal case has been adjourned several times as lawyers said talks were under way on a settlement.

TAX BILL

The settlement comes around two years after MTN agreed to pay a more than $1 billion fine for missing the deadline to cut off unregistered SIM cards.

Shares in MTN have fallen by around 20 percent since the end of August when the CBN asked the company to return the money.

The stock, which closed 2 percent higher on Monday, is also under pressure from a separate dispute with the attorney general of Nigeria (AGF), who has slapped the company with a $2 billion tax bill.

MTN has gone to court seeking to block the attorney general from taking further action regarding the order for back taxes. The matter was adjourned last month until next February.

"MTN Nigeria continues to maintain that its tax matters are up to date and no additional payment, as claimed by the AGF, is due, and consequently no provisions or contingent liabilities are being raised in the accounts of MTN Nigeria for the AGF back taxes claim," the company said.

 

- Reuters

Telecommunication firm, MTN Nigeria Communications Limited, on Tuesday, asked the Federal High Court in Lagos for a further adjournment in the suit it filed to challenge the $8,134,312,397.63 being demanded from it by the Central Bank of Nigeria.
 
CBN had asked MTN to pay the sum of The $8.1bn for alleged forex remittances infraction.
 
When the case came up on Tuesday, MTN’s lead counsel, Chief Wole Olanipekun, SAN, informed the court that his client had approached the CBN for possible amicable resolution of the dispute.
 
Olanipekun, prayed Justice Saliu Saidu to further adjourn the suit to enable parties to fully explore out-of-court resolution and deliberate on the terms of the settlement.
 
Read also: Nigerian govt declares Discos as failures, five years after privatisation
 
Seyi Sowemimo, SAN, the lead counsel for CBN, confirmed Olanipekun’s position, adding that discussions for possible out-of-court settlement were in the advanced stage.
 
Justice Saidu adjourned till December 12, 2018, for a report of the settlement between the parties.
 
It would be recalled that MTN had filed the suit, marked FHC/L/CS/1475/2018, in November, urging the court to declare that the CBN acted ultra vires of its statutory powers when it wrote an August 28, 2018 letter to it demanding a refund of $8.1bn.
 
The firm urged the court to hold that the CBN’s $8.1bn demand was “illegal, oppressive, abusive, unauthorised and unconstitutional.”
 
 
Source: The Ripples
Telecommunication company, MTN Nigeria, has sued the Nigerian government to the tune of N3 billion.
 
The firm, in the new suit, is challenging the legality of N242 billion and $1.3 billion import duties and withholding tax demanded from it by the Nigerian government.
 
The embattled company, in the suit filed at the Federal High Court in Lagos, is demanding the N3 billion for general and exemplary damages and legal costs from the defendant.
 
A judge, Chukwujekwu Aneke, on Thursday, adjourned the suit until December 3 for hearing after counsel confirmed that motions have been filed and served on parties.
 
In the suit filed on September 10, the telecom firm is contending that the purported “revenue assets investigation” allegedly carried out by the Nigerian government for the period of 2007 to 2017 violates the Nigerian constitution.
 
Also, the telecom firm is claiming that the government’s decision conveyed through the Office of the AGF by an August 20 letter, violates the provisions of Section 36 of the 1999 Constitution.
 
The firm is seeking a declaration that the AGF acted in excess of its powers by purporting to direct through its letter of May 10 a “self-assessment exercise” which usurps the powers of the Nigerian Customs Service to demand payment of import duties on importation of physical goods.
 
It is also seeking a declaration that the AGF acted illegally by usurping the powers of the Federal Inland Revenue Service (FIRS) to audit and demand remittance of withholding and value added taxes.
 
According to the suit, the telecom firm prayed for a declaration that the AGF’s demand of the sums is premised on a process that is malicious, unreasonable and made on incorrect legal basis.
 
The Central Bank of Nigeria had been at loggerheads with the telecom firm following sanctions over alleged illegal repatriation of funds. The CBN accused MTN Nigeria of improper dividend repatriations and demanded that $8.1 billion be returned “to the coffers of the CBN”.
 
Abubakar Mallami, the Attorney-General of the Federation, in a separate move, also slammed a tax bill on the firm, wherein he accused MTN of unpaid taxes on foreign payments and imports, asking it to pay approximately $2billion in relation to the taxes.
 
According to the CBN, MTN and four banks flouted the “laws and regulations…including the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 and the Foreign Exchange Manual, 2006.”
 
The four banks––Standard Chartered Bank, Citi Bank, Stanbic IBTC Bank and Diamond Bank – were subsequently debited. They all denied wrongdoing.
 
Hearing of the new suit has been scheduled for December 3.
 
 
Source: Premium Times

The disputes between MTN Nigeria and Nigerian authorities over $10 billion in repatriated funds and back taxes could increase risk in South Africa’s financial system depending on the outcome, the South African Reserve Bank (SARB) has said.

MTN Nigeria, a subsidiary of a South Africa-based telecommunication giant, MTN Group, is facing severe pressure from the Central Bank of Nigeria (CBN) to return $8.1 billion it repatriated from Nigeria through illegal means.

Also, the Office of the Attorney General of the Federation (AGF) also demanded a sum of $2 billion in tax arrears from the South African firm, bringing the total claim by the federal government to $10.1 billion.

“The immediate, or at least near-term, repatriation of the funds to the Nigerian authorities could affect MTN Group’s ability to continue meeting its debt obligations, including those in the South African banking sector, which, given the interconnected nature of the financial system, could increase systemic risk,” the South African apex bank said in its Financial Stability Review released Wednesday in the capital, Pretoria.

The claims amount to almost all of MTN’s market value of about $12 billion, SARB stated further.

A “potential worst-case scenario” would be for MTN to pull out of Nigeria, which would increase the company’s exposure level to reputational risk, the Reserve Bank said.

On August 29, the CBN directed MTN to refund $8.1 billion shareholders’ funds it allegedly repatriated from the country through illegal means, while it imposed a combined 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.

In early September, the teleco, which has Nigeria as its largest market, sought a court injunction restraining CBN from demanding that the amount should be refunded in order to buy itself time and fight the claim which wiped as much as 18 percent off its market value within two weeks.

”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 telecom firm said in a statement.

In separate legal documents, the CBN asked the court to deny MTN’s request and said the telecommunication firm should pay 15 percent annualised interest on the sum until the court make a judgment and 10 percent from then until the whole amount is paid.

Last week Tuesday, a Federal High Court sitting in Lagos adjourned hearing in the case between MTN and the AGF over the alleged $2 billion unpaid tax bill till today, Thursday, November 8, while the court adjourned till December 4 to hear the case between the telco and CBN.

 

Source: The Punch

HSBC and UBS have closed their offices in Nigeria, the country’s central bank said in a report on Friday as it revealed foreign investment had fallen sharply from a year ago.

The bank said foreign direct investment in Nigeria fell to 379.84 billion naira ($1.2 billion) in the first half of the year from 532.63 billion naira ($1.7 billion) a year earlier.

It did not given reasons for the bank closures.

HSBC was not available to comment and UBS declined to comment.

The central bank said the outlook for the Nigerian economy in the second half was “optimistic” given higher oil prices and production but rising foreign debt and uncertainty surrounding the 2019 presidential election was a drawback.

Investor confidence in the West African country has been shaken since the central bank in August ordered MTN to bring back $8.1 billion to the country, part of profits which the South African telecoms firm sent abroad.

An HSBC research note dated July 18 said a second Buhari term “raises the risk of limited economic progress and further fiscal deterioration, prolonging the stagnation of his first term, particularly if there is no move towards completing reform of the exchange rate system or fiscal adjustments that diversify government revenues away from oil.”

The Nigerian Presidency has reacted furiously after British multinational banks report. In a statement, the Presidency accused the bank of thriving on "grand corruption" and helping past and present Nigerian leaders launder billions of naira.

LOAN LOSSES

The central bank also said three lenders failed to meet its minimum liquidity ratio of 30 percent, without naming them.

It added that non-performing loans (NPLs) have dropped to 12.4 percent as at June 2018 from 15 percent a year ago, still a long way above its 5 percent threshold.

“To further consolidate on the improvement, the Central Bank of Nigeria directed banks to intensify efforts at debt recovery, realisation of collateral for lost facilities and strengthening their risk management processes,” it said in the report.

In September, the regulator withdrew the license of Skye Bank for failing to recapitalise. It then transferred Skye’s assets to a “bridge bank” Polaris wholly-owned by the state-backed asset management company AMCON.

Nigerian banks have been trying to raise fresh capital after huge loan losses worsened by an economy that has just emerged from a recession. Diamond Bank last week denied it was in talks with investors to raise cash but said it was managing its capital, which borders on the regulatory minimum, to grow.

Another lender Unity Bank has been seeking to raise fresh funds to recapitalise.

 

Credit - Reuters

The envoys of the United States of America (US) and United Kingdom (UK) in Nigeria have said that the dispute between the country’s leading telecommunication firm, MTN, and the government was frightening investors from their countries into Nigeria.
 
Both envoys spoke in Lagos on Thursday on the sideline of the 2018 International Investment Conference organised by the Lagos Chamber of Commerce and Industry as part of activities marking the 2018 Lagos International Trade Fair.
 
On August 29, the Central Bank of Nigeria (CBN) directed MTN to refund $8.1 billion shareholders’ funds it repatriated from the country through illegal means, while it imposed a combined 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.
 
Two weeks later, the telco was indicted by the Office of the Attorney General of the Federation (AGF), demanding for another $2 billion tax default, bringing the total claim by the federal government from MTN to $10.1 billion.
 
Reacting, Consul General, US High Commission, John Bray, said the issues facing the South African MTN was sending a wrong signal to investors that existing rules could be changed.
 
“Apparently things are being resolved, but once you make an announcement like that (order to repatriate the funds), there are probably guys sitting back there and waiting to get on the plane and fly back to the JFK and say, I am not investing again,” he said.
 
Bray noted that US business owners had continued to invest in Nigeria with last year’s investment totalling $13.5 billion.
 
“So, we just want to get more investors here and part of that is improving the regulatory environment, improving infrastructure and dampening their fears about insecurity,” he added.
 
Also speaking, the British Deputy High Commissioner to Nigeria, Laure Beaufils, said the MTN saga was as damaging for the country, adding that investors were always conscious of such signals.
 
“Of course, investors are interested in regulations, policies and strategies, but ultimately, they look at signals like that and I think that was damaging. I think most people in Nigeria recognise that that was very damaging.
 
“There is a lot that is being done to address that and we are aware of that but sadly, investors also go beyond the headlines of such stories and my key point today is that we have to avoid such rash decisions at all cost in the interest of further investments that are absolutely essential to the economic development of the country, to job creation and to the vision that we all have of an incredibly rich and vibrant Nigeria.
 
“Our team is increasing. When the Prime Minister was here; she set up a new economic development forum with the President to discuss how we can grow from strength to strength and further increase our bilateral cooperation.
 
“She committed to the UK becoming the first G7 investor in Africa by 2022. She also said that our development finance institute, the CDC, will be investing a further £3.5 billion in Africa in the next few years, and a lot of that should come to Nigeria.
 
“There is huge amount of interest in Nigeria. We are already the first investor in Nigeria and we want to continue to build on that; but what we are saying is what investors are looking at is predictability in decision making and application of regulations and policies; and so, they are looking at ensuring that the rule of law systematically applies and they are watching keenly to see what happens in Nigeria going forward,” Beaufils said.
 
 
Source: The Ripples
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