• Friday, July 19, 2024
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BusinessDay

Ex-US attorney general meets NCC over MTN fine

MTN-network-upgrade

Former US attorney general Eric Holder has held preliminary discussions with the CEO of Nigeria’s telecoms regulator, NCC Umaru Danbatta regarding the unprecedented fine imposed on MTN, the regulator’s spokesman, Tony Ojobo, has said.

MTN Group Ltd. hired the former U.S. Attorney-General in the hope that his involvement will help talks with Nigerian regulators about settling a $3.9 billion fine.

It was learnt that Holder has already held initial talks with the NCC Chief Executive Officer regarding the record penalty, which was imposed on Africa’s largest wireless company for missing a deadline to disconnect unregistered subscribers.

As US attorney-general between 2009 and 2015, Eric Holder presided over the biggest corporate settlements in US history. These included the $13bn that JPMorgan Chase paid over the sale of mortgage-backed securities before the financial crisis, and BP’s $18bn fine for the Horizon oil spill.

Proportionately, the penalty facing MTN is much greater at nearly 95 per cent of its earnings in Nigeria — its largest market with 62m subscribers — and 42 per cent for the group. But so far Nigerian authorities have been largely unmoved by company pleading, arguing the figure was computed strictly according to laws set out in 2011.

The Financial Times reported the hiring of Mr Holder but MTN officials are unwilling to confirm the move.

“We have consultants working for us across the globe,” MTN spokesman Chris Maroleng said by phone, declining to comment on Holder.

“Holder’s experience as attorney-general in dealing with corporates with a lot of problems was interesting to MTN,” said one person close to the negotiations. The person said MTN hoped Mr Holder’s “experience and stature could inject some balance into the equation”.

MTN shares gained 0.4 percent to 126.14 rand as of 11:52 a.m. in Johannesburg, reducing the decline since the fine was made public on Oct. 26 to 34 percent.

That values the company at 233 billion rand ($14.4 billion).

The penalty was originally set at $5.1 billion before an appeal by MTN led to a reduction by 25 percent.

A Lagos court said Jan. 22 that the matter would be adjourned until March 18, allowing the two parties to reach an agreement.

Holder, a partner at Washington D.C.-based law firm Covington & Burling LLP, advises clients on litigation matters, including those that are international in scope and involve significant regulatory and reputational concerns, according to the company’s website. He was attorney-general from 2009 to 2015.