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The Central Bank of Nigeria (CBN) might have gone all the way out in its claims against MTN Nigeria.
Court documents pertaining to the case between the apex bank and telco reveal the CBN had requested the court to compel MTN to pay 15% annualised interest on the sum until the courts make a judgment, and 10% until the sum is paid.
The telco had taken the CBN and the Office of the Attorney General of the Federation (AGF) to court, in a bid to protect MTN Nigeria’s assets and shareholders’ rights.
Prior to this
The company in late August was asked to return the sum of $8 billion, which the CBN believes was illegally moved out between 2006 and 2016.
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The four banks involved in the transaction: Standard Chartered, Citibank, Stanbic IBTC and Diamond bank were fined N5.86 billion. All parties involved have denied any wrongdoing.
The Office of the Attorney General of the Federation has also slammed a $2 billion back tax on the firm.
The ripple effect
The ensuing controversy spooked foreign portfolio investors in the country, with some of them exiting their holdings. The CBN was then forced to issue a statement allaying their fears of a possible retroactive application of the country’s foreign exchange laws.
CBN Governor Godwin Emefiele also reiterated this in response to questions posed at last week’s Monetary Policy Committee (MPC) meeting. According to him, all parties involved were discussing and the banks had submitted additional documents backing their claims.
A much-awaited Initial Public Offering (IPO) by its Nigerian unit may also be put on hold.
The troubles at the Nigerian unit have also led to a slide in the parent company’s share price. Year to date, the stock is down 33% on the Johannesburg stock exchange.
Shylock demands !! Really !!!
It’s always sad to see Nigerian writers who should know better criticizing regulators when they take punitive actions against companies that flout Nigerian laws and regulations. Especially when the same company in question (MTN) has been fined in other territories for various offences. Just because previous administrations had been turning a blind eye to the activities of MTN and other companies in Nigeria doesn’t mean that they will not be held accountable for their actions one day. MTN broke the rules and was aided and abetted by other accomplices. Regulators of course will apply sanctions to all those involved. The main crux of the matter is why does MTN NOT follow the laid down procedures and regulations like other companies but always feels untouchable or above board. That is where the focus should be and not on regulators doing their jobs.