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MTN 'cooperating' with Nigerian investigation

Paula Gilbert
By Paula Gilbert, ITWeb telecoms editor.
Johannesburg, 24 Oct 2016
MTN continues to deny allegations it improperly repatriated funds from Nigeria and "will strongly defend any action that would be prejudicial to its interest".
MTN continues to deny allegations it improperly repatriated funds from Nigeria and "will strongly defend any action that would be prejudicial to its interest".

MTN says it is cooperating with a Nigerian investigation into whether the company illegally repatriated almost $14 billion (R195 billion) out of the country over 10 years.

MTN already refuted the allegations ? made on the floor of the Nigerian Senate last month ? that MTN Nigeria and its bankers had improperly repatriated funds between 2006 and 2016. MTN Nigeria CEO Ferdi Moolman said the allegations "are completely unfounded and without any merit".

However, Nigeria's Senate committee on banking and insurance and other financial institutions has commenced an investigation into the alleged "unscrupulous violation" of the Foreign Exchange (Monitoring and Miscellaneous) Act.

"MTN Nigeria, four commercial banks, certain MTN Nigeria directors and shareholders, the Central Bank of Nigeria and others appeared before the Senate on 20 October 2016 at the outset of this investigation," MTN confirmed in its quarterly update for the period ended 30 September 2016, released on SENS this morning.

"MTN Nigeria and its bankers are cooperating with the investigation with a view to resolving the matter as expeditiously as possible," says MTN group executive chairman Phuthuma Nhleko.

In the interim, the Central Bank of Nigeria has instructed the banks to suspend any remittance of dividends until further notice.

MTN says its Nigerian business has not declared a dividend since April 2015 and MTN Nigeria has no intention to make any dividend payments over the next six months. This as the group says it remains committed to paying a N330 billion (R14.6 billion) fine related to the late disconnection of improperly registered SIMs in Nigeria. The original N1.04 trillion (R71 billion at the time) penalty, slapped on the operator in October 2015, was negotiated down to N330 billion (R25 billion at the time) in June 2016.

"MTN Nigeria continues to refute the allegations that MTN Nigeria had improperly repatriated funds from Nigeria. Consequently, MTN Nigeria will strongly defend any action that would be prejudicial to its interest."

The original allegation came from a motion submitted to the upper house by senator Dino Melaye in September 2016, which said the funds had allegedly been repatriated illegally out of Nigeria between 2006 and 2016 in collusion with four commercial banks. Last week, the Senate heard that the amount might be even higher than previously thought, with a lawmaker calling the sum "mind-boggling".

Nigeria is MTN's biggest market and at the end of September it had 60.5 million subscribers in the country. According to the latest quarterly update, the MTN group has a total of 234.7 million customers in 22 countries across Africa and the Middle East.

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