The central bank of Nigeria (CBN) is to review the sanction it imposed on Standard Chartered Bank, Citi Bank, Stanbic-IBTC and Diamond bank over their alleged involvement in the irregular issuance of certificates of capital importation, CCIs on behalf of MTN which was the basis of the order on the telecoms giant to repatriate over eight billion dollars it exported out of Nigeria.
In August the CBN had imposed a total fine of N5.87bn on the four banks citing flagrant violations of Nigeria’s foreign exchange monitoring and miscellaneous act of 1995 and the 2006 foreign exchange manual when the banks acted for MTN in the repatriation from Nigeria of a total of $8.134bn at various times between 2007 and 2015.
However, on December 24, the CBN virtually reversed its order when it said that on the basis of fresh facts submitted by MTN, the telecommunications giant was being let off with a “notional” reversal of the repatriation involving the private placement that will compel it to pay a difference in value of about N30 per dollar and amounting to $53m.
This simply means MTN is to pay the exchange rate differential between the time the CCIs were issued (N120 per dollar) and the rate of N150 per dollar at the time the case was first flagged.
This after the apex bank said it established a technical error involved in the issuance by banks of the CCIs relating to the repatriation of proceeds of a private placement conducted by MTN in 2008 and which allowed its original shareholders to sell about 10 percent of the shares of the company to Nigerian investors.
BusinessDay has now learnt that not all the four banks sanctioned by the CBN in August were involved in the private placement transaction or the issuance of CCIs which resulted from the deal.
When he spoke to BusinessDay as the story of the settlement broke on Monday, CBN Governor Godwin Emefiele admitted to the matter with MTN having been amicably resolved but also added that the matter involving the banks was still being discussed as at the time but he offered no details.
“If MTN was sanctioned only on the basis of the private placement, then it makes sense that if there are banks which did not play any role in the repatriation of proceeds from this private placement that they be granted a reprieve by the central bank,” one banking analyst told our reporter last night.
When the matter first came up in August, MTN shares collapsed by about a third on the Johannesburg stock exchange, wiping out almost half the value of the pensions of teachers in South Africa but the shares rose about 10 per cent Thursday on reports the matter has been settled by MTN accepting to pay $53m to Nigeria and without the telecoms giant having to admit to any wrong doing.
Leading economist Bismarck Rewane of Financial Derivatives Company called the resolution positive for Nigeria which is struggling to attract foreign direct investment to act as catalyst to grow its economy which remains in troubled waters despite having emerged from a devastating recession.
Analysts say with this resolution, MTN is now expected to focus on its planned IPO in Africa’s largest economy which promises to be the biggest offer for a Nigerian bourse desperate for depth.
