The Johannesburg-listed shares of MTN Group rose more than 5% on Friday after the announcement that Nigeria’s Attorney General and Justice Minister, Abubakar Malami has withdrawn a $2billion tax demand.
It opened at 7,901 ZAC and closed at 8367, a jump of 5.30 per cent.
On the Lagos bourse, the announcement did not make any major impact as the stock closed at N116, the same price as on Thursday. On Friday 4,718,922 shares valued at N549,173,548 exchanged hands.
Nigeria is MTN’s biggest market, with roughly 60 million users.
Malami’s office and MTN Group, issued two separate statement on the decision.
In a letter filed with the Nigerian Stock Exchange, MTN said the government had decided to drop its case and refer the issue to tax and customs authorities “with a view to resolving contentious issues”.
“We are very pleased with the decision of the (attorney general) and we commend him for his wisdom,” MTN Nigeria’s Chief Executive Ferdi Moolman said in a statement.
In a statement, the office of Attorney General Abubakar Malami said the decision “demonstrates unflinching commitment to the rule of law where all statutory agencies will be allowed to independently work with a view to fulfilling their mandates.”
Malami had ruled that the firm owed taxes relating to the import of equipment and payments to foreign suppliers from 2007 to 2017.
The company, whose local unit listed on the Nigerian Stock Exchange last year, said at the time that it would sell more shares to the public and increase local ownership once the tax row was resolved.
MTN has a contentious history with Nigerian authorities.
In 2015, the communications regulator handed MTN a $5.2 billion fine https://reut.rs/36IFw61 for failing to disconnect unregistered SIM cards. MTN eventually reached a deal in which the fine was cut to $1 billion.
In August 2018, MTN’s shares fell by more than 20% after the central bank demanded the company repatriate $8.1 billion that it said the company had illegally sent abroad.
MTN agreed to pay $53 million to settle the case.