MTN shares surged as high as 8.2 percent on Thursday after it reached a truce with the CBN over allegations that it illegally transferred $8.1 billion of funds out of Nigeria.
The embattled teleco had seen more than $3 billion of its market value erased since the news of the fund-transfer allegations came to light in August, with the stock losing more than a third of its value.
How it all began
The Central Bank of Nigeria (CBN) in August fined four banks a total of ₦5.86 billion for breaching Nigeria’s extant laws and forex rules when they facilitated illegal repatriation of funds to South Africa on behalf of MTN.
The CBN sanctioned the bank after evidence emerged about how they used irregular Certificates of Capital Importation (CCIs) to remit funds on behalf of MTN’s offshore investors.
The CBN then asked the banks and MTN Nigeria to immediately repatriate a total of $8.134 billion; being part of funds that were illegally taken out of the country.
The CBN upon review of the additional documentation concluded that MTN Nigeria was no longer required to reverse the historical dividend payments made to MTN Nigeria shareholders.
The apex bank however maintained that proceeds from the preference shares in MTN Nigeria’s private placement remittances of 2008 of circa USD$ 1 billion were irregular having been based on CCIs that only had an approval-in-principle, but not final regulatory approval of CBN.
More hurdles for MTN in Nigeria.
Recall thay the AGF had accused the firm of failing to pay taxes amounting to $2.0 billion. The taxes span over a ten-year period and are related to the importation of foreign equipment into the country as well as payments to the suppliers of the said equipment.
The company also maintained its tax payments were up to date, and it had made no provisions for the back taxes the AGF alleged the company was owing.