Picture: BLOOMBERG/WALDO SWIEGERS
Lagos — MTN’s shares rose the most in more than six
months after the Nigerian central bank softened its stance over claims
that Africa’s biggest wireless carrier illegally transferred $8.1bn out
of the country.
The Central Bank of Nigeria (CBN) made the accusation in late August, plunging the South African company into a crisis that’s wiped almost a third off its share price. MTN has since provided additional information that may lead to an “equitable resolution”, a spokesperson for the authority, Isaac Okorafor, said in an e-mailed statement late on Wednesday.
Four banks — Standard Chartered, Citigroup, Stanbic IBTC and Diamond Bank — have also provided further detail on the transactions that will be reviewed by the central bank, Okorafor said. The quartet were fined about $16m between them for enabling the allegedly improper transactions.
The latest development suggests there may be a way for MTN to make a deal with Nigeria, just as the company did two years ago when it negotiated a $5.2bn fine down to about $1bn plus a commitment to list its local business in Lagos. However, that penalty — related to subscribers that were not properly registered in the country — also weighed heavily on the share price, which has yet to recover.
The central bank’s statement did not refer to $2bn of back taxes MTN is also accused of owing — a claim that comes from the attorney general’s office.
“While this is a step in the right direction, continued dialogue to reach an amicable resolution is a minimum standard expected by the investment community,” Olusola Teniola, president of the Association of Telecommunications Companies of Nigeria, said. “We look forward to the central bank disclosing the exact reasons for their actions.”
MTN Nigeria said it could not immediately comment.
MTN climbed 7.5% to R78.87 by 9.32am on the JSE on Thursday, its biggest gain since March 8. The stock is still down 27% since the $8.1bn claim was made on August 29, wiping out almost $5bn of market value.
MTN’s response to the double accusation was to go to court, saying allegations by both the Nigerian central bank and attorney-general are unfounded, malicious and illegal. CEO Rob Shuter flew to the country to reassure employees of the company’s commitment to the market, MTN’s biggest with about 66-million customers.
The impasse comes five months before Nigerian President Muhammadu Buhari seeks re-election for a second four-year term. He has pledged to crack down on graft in Africa’s most populous country, including that perpetrated by companies.
Bloomberg
The Central Bank of Nigeria (CBN) made the accusation in late August, plunging the South African company into a crisis that’s wiped almost a third off its share price. MTN has since provided additional information that may lead to an “equitable resolution”, a spokesperson for the authority, Isaac Okorafor, said in an e-mailed statement late on Wednesday.
Four banks — Standard Chartered, Citigroup, Stanbic IBTC and Diamond Bank — have also provided further detail on the transactions that will be reviewed by the central bank, Okorafor said. The quartet were fined about $16m between them for enabling the allegedly improper transactions.
The latest development suggests there may be a way for MTN to make a deal with Nigeria, just as the company did two years ago when it negotiated a $5.2bn fine down to about $1bn plus a commitment to list its local business in Lagos. However, that penalty — related to subscribers that were not properly registered in the country — also weighed heavily on the share price, which has yet to recover.
The central bank’s statement did not refer to $2bn of back taxes MTN is also accused of owing — a claim that comes from the attorney general’s office.
“While this is a step in the right direction, continued dialogue to reach an amicable resolution is a minimum standard expected by the investment community,” Olusola Teniola, president of the Association of Telecommunications Companies of Nigeria, said. “We look forward to the central bank disclosing the exact reasons for their actions.”
MTN Nigeria said it could not immediately comment.
MTN climbed 7.5% to R78.87 by 9.32am on the JSE on Thursday, its biggest gain since March 8. The stock is still down 27% since the $8.1bn claim was made on August 29, wiping out almost $5bn of market value.
MTN’s response to the double accusation was to go to court, saying allegations by both the Nigerian central bank and attorney-general are unfounded, malicious and illegal. CEO Rob Shuter flew to the country to reassure employees of the company’s commitment to the market, MTN’s biggest with about 66-million customers.
The impasse comes five months before Nigerian President Muhammadu Buhari seeks re-election for a second four-year term. He has pledged to crack down on graft in Africa’s most populous country, including that perpetrated by companies.
Bloomberg
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