Nigeria agrees N300bn fine with MTN

MTN Group Ltd. agreed to pay a 300 billion naira ($1.7 billion) fine to the Nigerian government over charges that the firm failed to disconnect undocumented subscribers last year.

MTN also committed to list its Nigerian business on the local exchange as soon as it is commercially and legally expedient.

The final sum agreed represents one-third of the original penalty, removing a major uncertainty hanging over the phone carrier’s operations in its largest market.

When the fine was first imposed, many had argued that it was outsized, with little or no bearing with the offence and in particular that Nigeria could scare away investors with such high-handed approach.

As proof that MTN remains a key player in Nigeria, the firm was the only the bidder for the 2.6GHz  spectrum which Nigeria is now trying to auction.

MTN rose as much as 21 percent in Johannesburg. It traded 16 percent higher at 143.50 rand as of 1:21 p.m, on track for the biggest gain since 2008.

Africa’s biggest mobile-phone company will also “take immediate steps” to list shares of its Nigeria unit on the country’s stock exchange, Johannesburg-based MTN said in a statement on Friday. The fine will be paid over three years.

The agreement ends eight months of start-and-stop negotiations with Nigerian officials over how to settle the fine, which was levied for being slow to disconnect customers unregistered in the country. Chairman Phuthuma Nhleko came out of retirement to oversee the process, hiring former U.S. Attorney General Eric Holder to lead negotiations.

The deal “is the best outcome for the company,” Nhleko said in the statement. “The relationship between MTN, the Nigerian government and the Nigerian Communications Commission has been restored and strengthened.”