The shares of MTN Group today plunged by as much as 23 percent to a nine year low, a day after the Central Bank of Nigeria (CBN) ordered its Nigerian operations to repatriate $8.1 billion illegally sent abroad.

The demand by CBN is the latest setback for MTN in Nigeria, the South African group’s most lucrative but increasingly also its most problematic market. This comes two years after MTN, Africa’s biggest telecoms company, pleaded to pay more than $1 billion to end a dispute in Nigeria over unregistered SIM cards.

At 0940 GMT, MTN shares were down 21.4 percent at 84.35 rand, after touching 83 rand, a level last seen in 2009. The money is more than half of MTN’s market capitalisation, and analysts said the demand risked further undermining Nigeria’s efforts to shake off an image as a risky frontier market for international investors.

Denying the apex bank’s claim, MTN Nigeria’s public relations manager, Funso Aina in a statement sent to LEADERSHIP this morning said “MTN Nigeria strongly refutes these allegations and claims. No dividends have been declared or paid by MTN Nigeria other than pursuant to CCIs issued by our bankers and with the approval of the CBN as required by law.”

He said MTN Nigeria received a letter on 29 August 2018 from CBN alleging that CCIs issued in respect of the conversion of shareholders’ loans in MTN Nigeria to preference shares in 2007 had been improperly issued. “As a consequence they claim that historic dividends repatriated by MTN Nigeria between 2007 and 2015 amounting to $8.1 billion need to be refunded to the CBN.”

Aina stated further that “The issues surrounding the CCIs have already been the subject of a thorough enquiry by the Senate of Nigeria. In September 2016 the Senate mandated the Committee on Banking, Insurance and other Financial Institutions to carry out a holistic investigation on compliance with the Foreign exchange (monitoring and miscellaneous) Act by MTN Nigeria & Others.

“In its report issued in November 2017, the findings evidenced that MTN Nigeria did not collude to contravene the foreign exchange laws and there were no negative recommendations made against MTN Nigeria. We will engage with the relevant authorities and vigorously defend our position on this matter and provide further information when available” said the statement.

The MTN spokesman added that MTN Nigeria, as a law-abiding citizen of Nigeria, is committed to good governance and to abiding by the extant laws of the Federal Republic of Nigeria. The re-emergence of these issues is regrettable as it damages investor confidence and, by extension, inhibits the growth and development of the Nigerian economy, according to him.

The four banks that came under the hammer of the CBN for the CCIs violations were Standard Chartered Bank, Stanbic-IBTC, Citibank, and Diamond Bank for their role in moving the money out of Africa’s biggest economy. They were fined a total of N5.87 billion for flouting extant laws.

CBN, therefore, asked the managements of the banks and MTN Nigeria Communications Limited to immediately refund the sum of $8,134,312,397.63 illegally repatriated by the company to its coffers.

Meanwhile, Standard Bank said in a statement its unit was “not a beneficiary of any of the remittances made on behalf of clients and denies any imputation of malfeasance.”  CBN had fined Stanbic IBTC N1.8 billion ($6 million) for its role add ordered that it return $2.6 billion it repatriated on behalf clients, including MTN.

Last November, Nigeria’s Senate approved a report largely exonerating MTN, following an investigation after the business was accused of illegally repatriating $14 billion to its parent company.

Central Bank of Nigeria (CBN) correspondence regarding Certificates of Capital Importation (CCIs) in Nigeria

MTN Nigeria Communications Limited (MTN Nigeria) received a letter on 29 August 2018 from CBN alleging that CCIs issued in respect of the conversion of shareholders’ loans in MTN Nigeria to preference shares in 2007 had been improperly issued. As a consequence they claim that historic dividends repatriated by MTN Nigeria between 2007 and 2015 amounting to $8.1 billion need to be refunded to the CBN.