MTN settles with Nigeria

Company agrees to pay R764m ‘improperly repatriated’

An employee attends to a customer at an MTN shop in Johannesburg.
STAYING CONNECTED: An employee attends to a customer at an MTN shop in Johannesburg.
Image: Reuters

The Central Bank of Nigeria has reduced the amount it claims MTN improperly repatriated to SA from $8.1bn to $52.6m – about R764m at Thursday morning’s exchange rate of R14.52/$.

“MTN Nigeria and the Central Bank of Nigeria have agreed that they will resolve the matter on the basis that MTN Nigeria will pay the notional reversal amount without admission of liability,” the cellphone network said in a Sens statement on Thursday.

When its dispute with the central bank was announced in early September, MTN’s share price tumbled by more than a third from about R110 to R70.

MTN said it had provided documents to Nigerian officials which satisfied them that all but a $1bn (R14.52bn) preference share placement in 2008 had been done with the required approvals.

The preference share placement, however, required “certificates of capital importation” which had received approval in principle, but not final regulatory approval from Nigeria’s central bank, MTN said.

To settle this dispute, MTN agreed to reverse the transaction at a net cost of about 19.2-billion naira, or about R764m.

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

It indicated that commercial banks implicated in the dispute have not been let off the hook yet.

The settlement with Nigeria’s central bank has also not ended MTN’s tax dispute with the country’s attorney-general.

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

“The attorney-general matter came up for initial mention before the Federal High Court of Nigeria Lagos Judicial Division on November 8 2018 and has been adjourned to February 7 2019,” the statement said.

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