The shares of MTN Group yesterday plunged by as much as 23 percent to a nine year low, a day after the Central Bank of Nigeria (CBN) ordered the telecoms group 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 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 yesterday, 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 yesterday 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,” the statement read in part.

Meanwhile, following the directive of the CBN yesterday, managing director and chief executive of Access Bank, Herbert Wigwe, said operators in the industry plans to hold its Bankers Committee meeting soon to negotiate the sanctions. The Bankers Committee comprises of chief executive of banks as well as regulators in the banking industry. The committee last met on August 16, 2018. Alongside MTN, four banks, Standard Chartered Bank, Stanbic IBTC, Citi Bank and Diamond Bank, through which the illegally repatriated funds were transacted were sanctioned with a fine totalling N5.87 billion. Wigwe who said the bank has a minor holding at MTN group level said Access Bank was not exposed to the telecoms firm in Nigeria. The Access Bank MD said he expected a resolution on the matter as the regulator would want to avoid a systemic banking crisis. A repayment of $8.1 billion, is half of MTN’s market capitalisation, and could threaten its Nigerian lenders. The share price of the telecoms company had dropped by more than 25 per cent following the directive of the CBN and its Ghana unit missed its initial public offering target managing to only raise 1.14 billion cedis instead of 3.47 billion cedis. “The timing is peculiar and bad as the Ghana IPO didn’t raise as much money as they could have and this Nigerian saga may have spooked investors,” Cratos Capital’s Davies said.