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EDITORIAL

Out-of-court Settlement Over MTN’s $8.bn

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The accusation by the Central Bank of Nigeria, CBN, that MTN Nigeria repatriated a whopping $8.1 billion over a period of nine years, from 2006 to 2015, has led to a sharp disagreement between the federal government and the communication giant. After several months of legal tussle over the matter, the recent application by legal representatives of the telecommunication company, Wole Olanipekun, Senior Advocate of Nigeria, SAN, to have the case settled out of court seems to have been welcomed by many as a good means of resolving the matter.

The CBN governor, Mr Godwin Emefiele, had explained in August 2018 why it took the apex financial industry regulator almost nine years to uncover the alleged systematic repatriation from country of over $8.134 billion by the communication company. The nation’s apex bank discovered that the illegal repatriations in tranches of $2.63 billion, $1.766 billion and $348 million were done in brazen violation of the rule that says it can only be done with regular ‘Certificates of Capital Importation (CCIs)’ issued by the apex bank. MTN Nigeria, according to the apex bank, embarked on the repatriation of funds after the telecommunication firm illegally converted shareholders’ loan of $399, 594,146 to preference shares. Four erring banks involved in the deal were also fined for complicity in the deal. Standard Chartered Bank will pay a fine of N2.47 billion, Stanbic IBTC, N1.88 billion, Citibank Nigeria, N1.26 billion and Diamond bank, N250 million.

The order by the CBN on MTN Nigeria to reverse the transaction has attracted the angst of the US Consul General, John Bray, and British Deputy High Commissioner to Nigeria, Laura Beaufils who condemned the CBN over the manner it handled the matter. In August 2018, the CBN revealed that investigations were ordered in March 2018 after the banking supervision department of the CBN discovered a trail of the alleged illegal transactions more than two years earlier.

In its reaction, MTN Nigeria debunked the claims by the CBN that it illegally, in complicity with four Nigerian banks, repatriated $8.1billion from its Nigerian operations to offshore investors.

It said that issues surrounding the CCIs had already been the subject of a thorough enquiry by the Senate. From the report of the upper chamber of the National Assembly, the firm added, MTN Nigeria did not collude to contravene the foreign exchange laws and there were no negative recommendations made against the South African company.

In a bid to assert its innocence MTN Nigeria headed to court in September 2018 where it sued the CBN and the Attorney General of the Federation (AGF) over the matter. The telecom giant, which filed the suit at the Federal High Court, sought an injunctive relief restraining the CBN and the AGF from taking further action in respect of their orders.

This is not the first time MTN Nigeria is accused of under-the-table dealings.  In 2016, a fine of $5.2 billion was imposed on it by the federal government through the Nigerian Communications Commission (NCC). The imposition of the fine by the commission was in the exercise of section 20(1) of the Telephone Subscribers Regulation (TSR) law on MTN, for its inability to meet the deadline set up for the Mobile Network Operators (MNOs) to disconnect Subscribers Identification Modules (SIM) with improper registration or be fined $1000 on each unregistered SIM. According to the compliance audit report carried by the NCC, MTN Nigeria had 5.2 million un-deactivated lines.

As a newspaper, we support the out-of-court settlement option presently being pursued by both the CBN and MTN Nigeria, but efforts must be made to ensure that the interest of the nation is uppermost in any deal that will be struck. Unlike the controversies that trailed the earlier imposed fine of $5.2 billion, efforts must be made to avoid a repeat. Most importantly, transparency and fairness must be made cardinal principles. The regulatory mandates of the CBN should be strengthened and observed to put constant checks on companies.

 


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