Connect with us
nairametrics
UBA ads

Business News

REVEALED: MTN’s recent trouble was prompted by a whistleblower

Published

on

MTN Group Limited, NLC

As more facts continue to emerge about MTN’s recent troubles with the Nigerian authorities, it has been revealed that a whistleblower gave the tipoff that prompted an investigation by the Central Bank of Nigeria, CBN.

This was disclosed yesterday (September 4th) by Mr Ladidi Mohammed, the Head of Asset Recovery at the Officer of Nigeria’s Attorney General who granted a phone interview to Reuters on the matter.

UBA ADS

According to him, the whistleblower’s tipoff led the CBN to conduct the investigation that eventually led to Nigeria’s demand that MTN refund the sum of $8.1 billion which it had been accused of illegally taking out of the country.

As we reported, the CBN accused MTN of breaching Nigeria’s extant laws and forex rules when it remitted the sum of $8.1 billion with the help of four banks. The repatriated funds were used to shareholders and offset debts.

Meanwhile, MTN has continued to assert its innocence on the alleged illegality pertaining to the remittances. Just yesterday, the company said in a statement that “all dividend repatriation out of Nigeria was done on the basis of equity capital and with valid certificates.”

GTBank 728 x 90

MTN was also recently asked to pay the sum of $2 billion in back taxes which it owes the Nigerian Government; a development which the telco equally declines.

Currently, there is growing concern over the company’s ability to overcome all these regulatory challenges. Currently, MTN Group is reportedly lobbying authorities over the $8.1 billion demand which is about half of its market capitalisation.

There is also the uncertainty surrounding MTN’s planned Nigerian IPO which must happen by May 2019; lest the Nigerian Communications Commission (NCC) reimpose an initial fine of $5 billion.

Deal book 300 x 250

But despite MTN’s many regulatory issues, its Group CEO (Rob Shutter) said yesterday that the company remains committed to Nigeria. This is unsurprising, considering that Nigeria is MTN’s biggest market, generating most of its revenue.

app

Emmanuel holds an MSc. in International Relations and a B.A in Philosophy & Logic, both from the University of Ibadan. He is a communications professional. As a Lead Business Analyst at Nairametrics, he focuses mostly on quoted companies, their products/services, and the economy in which they operate. Emmanuel is also experienced in the areas of corporate communication, brand communication, corporate storytelling, public relations, business research, management/strategy, etc. You may contact him via his email- emmanuel.abara@nairametrics.com.

3 Comments

3 Comments

  1. Abiola

    September 5, 2018 at 11:33 am

    The ” whistleblower” was definitely a top management staff who was shown the way out with an unsatisfactory severance package and termination of appointment conditions. When a company like MTN treats staff like shit, the staff will give the company bullshit. Hopefully, the whistleblower’s cut from the deal (fine) will be a better payoff than his/her exit pay.

  2. Anonymous

    September 5, 2018 at 6:22 pm

    This matter is not new to the CBN and has in fact been investigated over recent years. So i doubt the connection to any whistle blower especially as no new material evidence that has not been public before now has now being made know as by the purported whistler as new evidence
    If any thing, it is rather disturbing and unfortunate that our regulators are starting to create an unfavourable impression about our commercial laws and the broader ease of doing business in Nigeria. This is a damaging reputation risk that is certain to cost us FDI
    This is a clear case of sovereign 419. Very sad

    H

  3. Adekunle

    September 6, 2018 at 4:09 pm

    It all goes to show the obvious fact that no matter the business and its ‘connections’, the right thing must always be done without which it comes back haunting. The best option for covering your tracks is to do the RIGHT thing, It guarantees peace.

    As a local parlance adage…”TRUTH covers in 1 day the distance leap of a LIE for 20 years”

    MTN is not the only multi-national in Nigeria even in the telecommunications sector. Some of us can remember Strive Masiwa’s Econet Wireless and its ‘misadventure’ with power brokers in the country.

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Companies

Just In: CBN debits banks another N459.7 billion for failure to meet CRR target

Sadly, this move, in addition to similar policies by the CBN, has left many banks cash-strapped and unable to pursue various profitable ventures.

Published

on

CBN

The Central Bank of Nigeria (CBN) has debited twenty-six banks, including merchant banks, to the tune of N459.7 billion for failure to meet their CRR (Cash Reserve Ratio) obligations. The fresh debit, which Nairametrics reliably gathered occurred yesterday, has left many stakeholders in the banking sector very upset.

The details: Among the banks that were most affected are United Bank for Africa Plc (N82.3 billion), First Bank of Nigeria Ltd (N59.3), Zenith Bank Plc (N50 billion), First City Monument Bank (FCMB) Limited (N45 billion), and Guaranty Trust Bank Plc (N40 billion). The rest of the affected banks can be seen in the table below.

UBA ADS

Note that the latest CRR debits are coming barely one month after a lot of banks were collectively debited to the tune of N1.4 trillion for the same reason in April. Between then and now, a lot of other minor CRR debits have occurred. Nairametrics understands that the apex bank now debits banks on a weekly basis.

Some backstory: During the CBN’s Monetary Policy Committee (MPC) meeting that was held last month, committee members voted to retain CRR rate at 27.5%. The rate was increased in January this year from 5% to its current level after the apex bank cited inflationary pressure concerns. What this means, therefore, is that Nigerian banks are required to keep 27.5% of their deposits as CRR with the Central Bank of Nigeria.

GTBank 728 x 90

But banks are silently upset: Sadly, this move, in addition to similar policies by the CBN, has left many banks cash-strapped and unable to pursue various profitable ventures. While reacting to the latest development, a banker who refused to be identified, said:

“What we’ve seen in recent times is that the CBN just indiscriminately debits banks, usually towards the stale-end of every week. They will look at your bank account and if your liquidity is plenty, they will debit you.

“You know the central bank also does what we call retail FX intervention, that is when they sell FX to corporates. Now, because they don’t want banks coming with huge demands, what they do is that a day before the FX sales, they debit the banks so that the naira you have available is small and you cannot put them under pressure because of your FX demands. That has really been the driver.

Deal book 300 x 250

“We understand that the central bank had set up a special CRR team that is supposed to monitor banks’ CRR once a month. But now, the team monitors banks’ CRR on a weekly basis. This is why the central bank is effectively debiting banks on a weekly basis. Some weeks ago, they debited some banks about N1.4 trillion. That was one of many. Between that time and now, there have been more debits that have happened. But the debits that are huge/significant are what is troubling the banks. There was a N300 billion that happened about two weeks ago. and then yesterday that was this N459.7 billion that was also debited.

“These are huge amounts that are leaving the banking sector. It’s a squeeze on the banks. A bank like First Bank, for instance, has about N1.4 trillion in CRR with the Central Bank. And there is Zenith Bank with equally as much as N1.5 trillion. These are monies that banks can potentially put in loans at 52% at 30%, or even put in money market instruments at maybe 10%. So, for a shareholder of these banks, this CRR debits are impairing the banks’ ability to increase their earnings because now are not able to use the funds that are legitimately theirs to create money for their shareholders. And the question is that under what framework is the Central Bank choosing to take people’s money?”

app

Patricia
Continue Reading

Business News

Christiano Ronaldo emerges first billionaire footballer ahead of Lionel Messi

Cristiano Ronaldo ranks Number 4 on the 2020 Forbes Celebrity 100 and making him the first soccer player in history to earn $1 billion. 

Published

on

Christiano Ronaldo emerges first billionaire footballer ahead of Lionel Messi

Cristiano Ronaldo has been crowned the first soccer billionaire ahead of his top rival in sport, Lionel Messi after earning a massive $105 million before tax and fees in 2019. This was announced by Forbes through its official website.

CR7 as he is popularly called, ranks Number 4 on the 2020 Forbes Celebrity 100, a spot above Lionel Messi, and making him the first soccer player in history to earn $1 billion.

UBA ADS

The 35-year old Juventus attacker is the third athlete to hit the $1 billion mark while still playing following Tiger Woods, who did it in 2009 on the back of his long term endorsement deal with Nike and Floyd Mayweather in 2017, who’s made most of his income from a cut of pay-per-view sales for his boxing matches.

The Portuguese star joined Juventus in 2018 in a deal worth $117.34 million after spending nine years with Real Madrid and within 24 hours of release, Juventus sold 520,000 Ronaldo jerseys worth over $60 million.

READ MORE: Meet Alan Sinfield, New CEO of 9Mobile

GTBank 728 x 90

He has amassed an ever-growing following of fans over the years. In January he became the first person with 200 million followers on Instagram alongside massive presence on Twitter and Facebook making him the most popular athlete on the planet.

Recall that in 2016, Nike signed Ronaldo to a lifetime deal and pays him upwards of $20 million annually couple with other sources of income including Real Estate, Social media influencing, etc. His 2020 earnings include a salary of $60 million, a slight decline compared to his earnings in 2018 due to a 30% pay cut he agreed to take in April as a result of the COVID-19 pandemic.

 

Continue Reading

Business News

Insurance: NAICOM revises recapitalisation guidelines

In our view, we think the decision to extend the deadline is reasonable under current circumstances. The coronavirus pandemic has ravaged global economic and financial systems thus making it more difficult for an already unattractive insurance sector to raise much-needed capital.

Published

on

NAICOM

In a circular communicated to insurance providers in Nigeria, National Insurance Commission (NAICOM) has announced an extension to the deadline for insurance providers to meet up with the regulator’s new minimum capital requirement. In addition, NAICOM has broken the recapitalisation exercise into two phases. The first phase must be complied with by 31 December 2020.

To comply, insurance providers must meet 50% of the new minimum capital requirements while reinsurance providers are required to meet up to 60% of the new minimum capital requirement. The second phase which will end on the final deadline of 30 September 2021 would require 100% compliance with the minimum capital requirement from all insurance and reinsurance providers.

UBA ADS

The revised guidelines requires Life insurance providers to have minimum capital of N4bn (existing minimum – N2bn) by 31 December 2020 and paid up capital of N8bn by 30 September 2021. General insurers are required to meet a minimum paid-up capital of N5bn (existing minimum – N3bn) and N10bn by 31 December 2020 and 30 September 2021 respectively. Composite insurers are expected to have a minimum of N9bn in paid up capital (existing minimum – N5bn) by 31 December 2020 and N18bn by 30 September 2021 while reinsurers should have N12bn (existing minimum – N10bn) in minimum paid up capital by 31 December 2020 and N20bn by 30 September 2021.

In our view, we think the decision to extend the deadline is reasonable under current circumstances. The coronavirus pandemic has ravaged global economic and financial systems thus making it more difficult for an already unattractive insurance sector to raise much-needed capital. We note that several players have initiated the process of raising the needed funds from their existing shareholder base via the right issues. However, we highlight that some of the players currently have a negative book value of equity and are trading below their par values. Hence, raising equity capital does not appear feasible. That said, we expect to see a flurry of mergers and acquisitions in the industry once conditions become more favorable.

GTBank 728 x 90

CSL Stockbrokers Limited, Lagos (CSLS) is a wholly-owned subsidiary of FCMB Group Plc and is regulated by the Securities and Exchange Commission, Nigeria. CSLS is a member of the Nigerian Stock Exchange.

Continue Reading