Nigeria's central bank eases up on MTN

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MTN has denied any wrongdoing.
MTN has denied any wrongdoing.

The Central Bank of Nigeria (CBN) is reviewing information provided by MTN and four banks accused of helping the South African telecoms company to illegally repatriate $8.1 billion, with a view to reaching an equitable resolution, it said yesterday.

Nigeria, which accounts for a third of MTN's annual core profit, is MTN's biggest market, but has proved to be problematic in recent years during which there have been multiple allegations of infractions.

The central bank said on 29 August that it had ordered MTN and the four banks to bring $8.1 billion back into Nigeria that it alleged the telecoms firm sent abroad in breach of foreign exchange regulations. Shares in MTN fell nearly a third in Johannesburg in the days after the announcement.

It also fined the banks. Standard Chartered was fined 2.4 billion naira ($7.86 million), Stanbic IBTC Bank 1.8 billion naira, Citibank 1.2 billion naira and Diamond Bank 250 million naira.

MTN has denied any wrongdoing and the banks have said they are in talks with the regulator.

"In response to the recent regulatory actions, the banks and MTN are engaging the CBN and have provided additional information which is currently being reviewed with a view to arriving at an equitable resolution," the central bank said yesterday in an e-mailed statement.

The statement gave no details on what an "equitable resolution" would entail.

MTN declined to comment in response to the central bank statement.

A spokeswoman for Citibank declined to comment, as was the case with a Diamond Bank spokesman.

Representatives of Stanbic IBTC Bank and Standard Chartered did not immediately respond to text messages and phone calls requesting comment.

Nigeria's financial regulator, in Wednesday's statement, said it would continue to welcome foreign investments, and the sanctions imposed on the banks were not designed to restrict access to investor returns.

"The CBN welcomes all legitimate investors to take advantage of the enormous investment opportunities in Nigeria," it said.

Nigeria's attorney general imposed a $2 billion tax bill on the telecoms firm days after the central bank's allegation that money was illegally taken out of the country.

In response to the tax demand, MTN filed a lawsuit in Nigeria last week against the attorney general. Court documents seen by Reuters show the telecoms firm has accused him of exceeding his powers.

MTN's latest troubles come about two years after it agreed to pay more than $1 billion to settle a dispute over SIM cards in Nigeria.

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