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MTN Fine: The Point PDP Missed



I read the reactions by the Peoples Democratic Party (PDP) to issues around the N1.04 trillion-fine imposed on the South Africa-based multinational mobile telecommunications company, MTN, and I felt obligated to point out an area that I am very sure the leading opposition party missed the point. The point has to do with international standards and global best practices. I will get to it shortly.
But permit a background to the bigger issue: The Nigerian Communications Commission (NCC), had on October 20, 2015 imposed a ban on MTN’s services for several regulatory infractions, including failure to deactivate 5.2 million improperly registered Subscribers Identification Module (SIM) cards, refusal to withdraw unapproved tariffs and promotions.
The non-deactivation of the SIM cards constituted a security threat. President Muhammadu Buhari alluded to that at his meeting with Jacob Zuma, then president of South Africa, during his visit to Nigeria, as salutary to the operations of the Boko Haram terrorists who had killed about 10,000 Nigerians. The point Buhari emphasized was that our national security was more important than the MTN fine.
The fine had come on the heels of MTN’s serial infractions. NCC’s compliance checks on MTN had shown its failure and refusal to comply with regulations. The NCC had consequently wielded the big hammer. MTN had to launch into a series of correspondence with the NCC in which it requested and pleaded for the lifting of the ban.
A series of meetings took place between the parties. The October 5, 2015 meeting significantly resolved all the outstanding issues and listed specific areas of compliance demanded of MTN by NCC, to wit: that the NCC should compile and communicate list of all outstanding infractions to MTN stating what they needed to do regarding each of the infractions; and that the MTN should resolve all the outstanding infractions within two weeks and revert to the Commission.
Besides, the meeting resolved that the Commission would monitor and validate the claims by MTN; that MTN must commit to settling all outstanding Annual Operating Levies (AOLs) debts from 2014; and, that MTN must pay all penalties resulting from the outstanding infractions. Having given effect to the resolutions, the NCC reviewed the plea by MTN and considered the fact that it had abated all the infractions that led to services’ suspension.
Steps were taken to lift the ban. In lifting the ban, the Commission had expected total compliance with Nigerian Communications Act (NCA) 2003, Regulations and the Terms and Conditions of Licences issued to MTN and had said that it would not hesitate to impose necessary sanctions where MTN flouted any provision of the regulatory instruments.
Indeed, the huge financial implications arose from non-payment of Annual Operating Licences and penalties on the outstanding infractions, particularly the timing of the disconnection of 5.2 million subscribers that was based on a charge of 200,000 naira ($1,008) for each unregistered customer. Mr. Sifiso Dabengwa, the Group Chief Executive Officer of MTN had to resign in the aftermath of the colossal fine.
A new management that was appointed employed diplomatic rapprochement between South Africa and Nigeria to get the fine reduced by 25 percent from $5.2 billion (N1.04 trillion) to $3.2 billion (N780 billion). MTN did not see that as the final settlement fees and moved to get a substantial slice off the fine. It hired a former US Attorney General, Eric Holder, to handle the issue of corporate settlement on the fine.
That was after MTN had gone to a Federal High Court in Lagos to challenge the decision by the Federal Government to enforce payment of the fine on the last day of 2015. It had also described the fine as not being in accordance with the NCC’s powers in the NCA. MTN had got an order from the Court stopping the Nigerian government from preventing it to move its funds in Nigerian banks out of the country.
But on January 22, 2016, NCC announced that MTN had been given up till March of the same year to reach an out-of-court settlement. On March 18, 2016, MTN, through its counsel, Wole Olanipekun (SAN) announced the withdrawal of the suit instituted against the NCC and the Nigerian government. MTN made an initial good faith payment of N50 billion to create a conducive atmosphere for further negotiations.
Through further negotiations, the fine was reduced to N330 billion as the final settlement demanded by the Nigerian government which was to be paid in some agreed tranches. The Nigerian government had engaged a team of lawyers that represented it on the negotiation. This is the point I hinted supra that the PDP missed or chose to miss.
I am not concerned about other allegations of impropriety leveled by the opposition party against the All Progressives Congress-led federal government, particularly the one bordering on the alleged N500 million-bribe given to certain interests in the Presidential Villa said to be close to President Buhari in respect of the negotiated fine. I just hope the PDP can prove the allegation.
My concern is the professional fees of N500 million that the PDP had insinuated was controversially approved to pay unnamed persons for unspecified purposes. I was fairly conversant with the story of the negotiation between MTN and the NCC/Federal Government. If the PDP had done its due diligence, it would have confirmed that the action taken by the NCC/Federal Government was in apple-pie order.
MTN, with a solid legal department, had engaged Olanipekun, one of the best SANs, to lead its team of lawyers and negotiators, including Holder, a former US attorney general. Similarly, the NCC, with a legal department, and the Office of the Attorney General and Minister of Justice were not encumbered to outsource such responsibility that needed the expertise of some of the best litigators and arbitrators in the area of corporate negotiation and settlement, especially when the issue was a national emergency.
Two teams had represented the NCC/Federal Government in the litigation and subsequent out-of-court negotiation and settlement. The NCC team, led by Yusuf Ali (SAN), comprised Paul Usoro (SAN); Professor Taiwo Osipintan (SAN); Yakubu Maikyau (SAN); and, Festus Keyamo (SAN), among others, while the AGF/FG’s team, led by Oladipo Okpeseyi (SAN), comprised Muiz Banire (SAN); Mr. Aliyu Umar (SAN); the Solicitor General of the Federation; and, the Deputy Director of Civil Litigation, among others.
It is a matter of records that MTN’s action generated heat both nationally and globally. The subject of attack was the Nigerian Communications Act of 2003. The legal teams defended the NCC, Federal Government and our national interest. They rendered services for some professional fees ranging between two and five percents.
Interestingly, this is “ridiculously” lower than what is obtainable in many jurisdictions where legal fees could go as high as 20 percent. Judging by the amount approved, which is about 1.5 percent of N330 billion, two issues should have been interrogated. The first issue is that the lawyers have been underpaid. Why? The answer probably finds collocation in the second issue which is that Buhari presidency had frugally handed the lawyers a fait accompli in a bid to save public fund; and, why not?
Understandably, MTN’s legal team, led by Olanipekun, had since been paid its fees without ballyhoo. The AGF office had followed due process and got Federal Executive Council (FEC) approval for the payment of the legal fees. The legal teams, which deserved more than what had been approved, would altruistically have to accept the fees as final settlement for services rendered in the national interest, just as my intervention also derived from a similar sense of altruism. Indeed, this journalistic exertion exemplifies a clarion call for constructive criticisms by the opposition parties.

–Ojeifo is an Abuja-based journalist