MTN Group, the parent company of MTN Nigeria has just announced that it has agreed to pay a negotiated fine of $1.7 billion fine to the Nigerian government, over its failure to disconnect unregistered mobile phone users. The fine is a huge reduction from the $5.2 billion fine earlier charged by the Government.
The company in its press release today confirmed that “MTN Nigeria has agreed to pay a total cash amount of N330 billion over three years.” stating that, the company has paid N50 billion out of the N330 billion, while the rest will be paid installmentally, over three years.”
The share price of MTN rose sharply by 18% as soon as the news was announced confirming investors respite. The deal also signals a huge sigh of relief for the government who will view this as a victory, following the outrage that met the fine. This fine will now rank as one of the biggest ever levied on a company in Africa.
The breakdown of the deal are as follows;
- The settlement also stipulates MTN`s mode of listing its local unit on the Nigerian Stock Exchange.
- Payment will be made in six installments over three years
- MTN already paid N50 billion as part of the N330 billion
- MTN has also agreed to list in the Nigerian Stock Exchange as soon as “commercially and legally possible”
The N1.04Trillion fine imposed on MTN, Nigeria by the Nigerian Communications Commission (NCC) the fine was yesterday reduced to N330Billion
— Govt of Nigeria (@AsoRock) June 10, 2016
NCC, MTN Reach Agreement on Fine.#EVCNCC#TONYOJOBO1@TonyOjobo1 pic.twitter.com/75jxpsAo36
— ncc.gov.ng (@NgComCommission) June 10, 2016
THE DECISION OF THE FEDERAL GOVERNMENT OF NIGERIA TO REDUCE THE FINE FROM $5.2 BILLION TO $1.7 BILLION IS LOGICALLY LAUDABLE AND COMMENDABLE. I AM HAPPY THAT BOTH SIDES,TO THE DISPUTE, HAVE DECIDED TO RESOLVE THE DISPUTE AMICABLY. THE NONCHALANT APPROACH EARLIER EXHIBITED BY MTN MANAGEMENT UNDULY DELAYED ACTION FOR RECONCILIATION FROM THE FEDERAL GOVERNMENT OF NIGERIA. THE CONSISTENT GROWTH OF MTN IN NIGERIA IS NOW GUARANTEED AS A RESULT OF THE MANAGEMENT DECISION TO ENLIST ON THE NIGERIA STOCK EXCHANGE.