The coast has now been cleared for the long promised out of court resolution of the $8.2 billion claim made against telecoms giant MTN Nigeria by the Central Bank and MTN Nigeria after the Attorney General who is a party in the suit, offered for the first time to accept any settlement reached by the apex bank.
The central bank had on August 29, 2018 ordered MTN and its four banks to repatriate a hefty $8.1bn it claimed had been illegally exported out of Nigeria as dividend on grounds of defective certificates of capital importation, CCIs.
The claim was immediately challenged in court by MTN and when the case came up for mention Wednesday in Lagos, lawyers to the parties requested for more time to conclude on going out of court settlement negotiations has dragged on inexplicably despite several assurances by the central bank that a settlement was not far off.
At Wednesday’s court session, the lawyers representing the Justice ministry offered for the first time the assurances of the attorney general that he will not contest any agreement which the CBN may reach with MTN which has over 64 million subscribers in Africa’s largest economy.
READ ALSO: MTN drops case against regulator in Ghana
Lawyers called this assurance by the attorney general an “ice-breaker” capable of smoothing the path for early resolution of the claim which has cast a pall over Nigeria’s investment credentials with Finance Minister Zainab Ahmed saying the matter has created difficulties for Nigeria among the global investor community.
Details of any possible deal have yet to surface and could yet fall through, said the person, but the attorney general’s willingness to accept a deal may have removed the biggest obstacle on the way of those negotiating an out of court settlement Businessday learnt.
“MTN Nigeria continues to engage with the relevant Nigerian authorities to ensure a mutually acceptable resolution of the matter,” a spokesman for Africa’s largest wireless carrier by sales said in an emailed statement to Bloomberg November 14.
MTN shares have rallied recently after it emerged that an out of court settlement of the claim was progressing. The stock has declined more than 25% on the Johannesburg bourse since the allegations were first made in late August.
The order to refund $8.134bn would come just two years after MTN paid about $1 billion to Nigerian authorities as a penalty for missing a deadline to disconnect unregistered subscribers. That levy, which was also substantially reduced from the original sum, led to MTN’s first-ever loss in 2016.
In a separate case, the company is accused by the office of Nigeria’s attorney general of non-payment of $2 billion in taxes. “It’s very important the parties reach a quick resolution because the problem gives the wrong signal to willing investors,” Gbenga Adebayo, chairman of the Association of Licensed Telecommunications Operators of Nigeria, said by phone from Lagos. There are many African countries that are investor friendly and are also craving for foreign investment.”
MTN pledged to list its local unit in Lagos as part of a settlement of the earlier penalty from 2015, although those plans are currently in doubt amid the current impasse.
MTN The stock is down by more than 50 percent since the start of that first dispute, which also led to an overhaul of management and the arrival of Chief Executive Officer Rob Shuter from Vodafone Group Plc.
