The postponement of MTN Nigeria‘s $2 billion tax case seemed to have boosted investors’ confidence after the network operator’s stock closed the market this week on a high compared to last week.
The telecommunications company’s stock price increased by 0.39% by the close of market today, settling at N129, after previously recording a day low of N122.6. Generally, it wasn’t an impressive run for MTN Nigeria which started the week on Monday, June 24, 2019, with N130 per share price.
Last week Thursday, MTN Nigeria reported a drop, crashing to N130 from N132 per share. It then remainned flat before dropping again on Tuesday and Wednesday this week, recording N129 and N128.50 kobo respectively.
A much needed lifeline was throw at MTN Nigeria, with the announcement of a shift in the case against the office of the Attorney General of the Federation, causing the stock of the company to rebound, peaking at N129. This shows an improvement in investors confidence, as the new date chosen for the continuation of the case is October 29, 2019.
What you need to know: The outcome of the case which was supposed to begin on Wednesday would have had a significant effect on investors’ interest in MTN Nigeria’s stock. Either way, the request for more time by the lawyers for the Attorney General’s Office had a positive impact on the stock.
More time had been requested to enable the Lawyers to prepare their case and file a response. Nairametrics had reported that the attorney general’s office had accused MTN Nigeria of failing to pay $2 billion in taxes and penalties, but the telecoms firm filed a case asking the court to rule on the legitimacy of the case, arguing that the AGF does not have the jurisdiction to determine unpaid taxes and therefore it should neither have to pay the tax bill nor related fines.
Why the case may stall: The law suit against the Attorney General’s Office started when Justice Abubakar Malami was serving as Nigeria’s Minister of Justice and Attorney General. He has since left the position in May, as the federal cabinet was dissolved on May 28, 2019, and a new appointment hasn’t been announced by President Muhammadu Buhari.
Note: There’s a fine of $1.3 billion which MTN Nigeria doesn’t want to pay. The court has granted the company’s wish. Now, MTN is demanding $8.3 million in general and exemplary damages, as well as legal costs to the company.