Yesterday, news filtered through that telecom giants, MTN, had been instructed by the Central Bank of Nigeria (CBN) to suspend dividend payment to their shareholders in Nigeria. Guardian reports that the CBN ordered the four commercial banks operated by MTN, Standard Chartered Bank, Stanbic IBTC, Diamond Bank and Citi Bank, to suspend dividend payout from Nigeria.
The South African telecoms firm in the letter to its shareholders, confirmed that “the CBN has instructed the banks to suspend any remittance of dividends until further notice… MTN Nigeria has no intention to make any dividend payments over the next six months.”
This is supposedly the backdrop of the allegations by the Senate, as put forward by Senator Dino Melaye, that MTN had moved $13.97 billion out of the country without obtaining certificates declaring it had invested foreign currency in Nigeria within a 24-hour deadline stipulated in a 1995 law.
Although the CBN’s spokesperson, Isaac Okorafor, has denied knowledge of such an order, shareholders have reacted very angrily to the move. These views describe the reason for their reason for disagreeing with the order.
“Well, the accusation may be due to payment of cash dividend to foreign shareholders in dollars without due approvals. But, we do not see any reason for the suspension of cash dividend if not that they have done something wrong. It is uncalled for. Dividend must be paid when declared. It is a debt,”- Timothy Olufemi, President, Renaissance Shareholders Association of Nigeria
“If the dividend has been declared in an annual general meeting, MTN has no right to suspend it. The investigation that is going on is a different thing entirely. A dividend that has been declared must be paid.”- Sola Abodunrin, President, Ibadan Zone, Shareholders Association of Nigeria.
“The illegal transfers do not concern the issue of dividend payout and MTN can only fish out those concerned in the transfer saga and it should not stop the payment of dividend to shareholders because it is an investment.” -Shehu Mallam Mikail, President, Constance Shareholders Association.
“The CBN cannot stop a legally registered company from declaring dividends or making dividend payments, unless there is evidence of criminal activity or a court order stipulates this in rare cases.”- Olushola Teniola, President, Association of Telecommunications Companies of Nigeria (ATCON).