MTN agrees to pay $52.6 million to settle Nigeria's forex repatriation issue – without admission of liability

MTN and Central Bank of Nigeria (CBN) reach an out of court settlement on the $8.1 billion alleged illegal repatriation of fund.
CBN says the proceeds from the preference shares in MTN Nigeria's private placement remittances of 2008 were irregular and issued without the final approval.
MTN to pay notional reversal of N19.2 billion ($52.6 million) for the 2008 'unapproved' remittances

Africa's telecoms giant, MTN and the Central Bank of Nigeria (CBN) have reached an out of court settlement on the $8.1 billion alleged illegal repatriation of fund fine.

CBN and MTN confirmed the resolution in separate statements released on Monday, December 24, 2018, that the fine was reversed to $53 million.

Isaac Okoroafor, CBN spokesman said the reversal was necessary after MTN Nigeria supplied additional material information not previously provided offered to the Bank, satisfactorily clarifying its remittances.

“Following the keen interest shown by various stakeholders sequel to the regulatory action, the CBN committed to engaging further with MTNN with a view to achieving an equitable resolution. Consequent upon the above, MTNN, led by its Nigerian shareholders, held intensive engagements with the CBN in the course of which it supplied additional material information, not previously offered to the Bank, satisfactorily clarifying its remittances.

Nigeria's central bank governor Godwin Emefiele speaks during Monetary Policy Committee meeting in Abuja, Nigeria January 26, 2016. ece-auto-gen

“Having now reviewed the additional documentation provided by the company, the CBN has concluded that MTNN is no longer required to reverse the historical dividend payments made to MTN Nigeria shareholders.”

Okorafor further states that the proceeds from the preference shares in MTN Nigeria's private placement remittances of 2008 were irregular having been based on CCIs that were issued without the final approval of CBN.

MTN agrees to $52.6 million proceeds in the 2008 irregular remittances

On its part, MTN Group Ltd., in a statement released on the Johannesburg Stock Exchange confirming the latest development. The telecom firm said it agreed with the monetary regulator to pay the notional reversal of N19.2 billion ($52.6 million) without admission of liability in the 2008 remittances.

“This is on the basis that certain certificates of capital importation (CCIs) utilised in the private placement were not properly issued..,” a statement seen by Business Insider Sub-Saharan Africa reads.

ALSO READ: All you need to know as Nigeria’s central bank and MTN go head-to-head in new forex saga

MTN vs Nigeria case over tax demand continues

As the CBN and MTN agreed on a settlement out of court on forex repatriation issue, its case on tax demands by the Attorney General of Federation will continue.

MTN Nigeria maintained that its tax matters are up to date and no additional payment, as claimed by the AGF, is due, and “consequently no provisions or contingent liabilities are being raised in the accounts of MTN Nigeria for the AGF back taxes claim.”

The matter is currently in court and will be due for hearing on February 7, 2019.

How it all started?

In August, Nigeria's central bank (CBN) ordered MTN to “refund a total of $8.134 billion moved out of the country" for breaching the country's forex regulations.

The apex bank also slammed a huge N5.8 billion fine on the banks for allegedly aiding MTN in the illegal capital repatriation. The bank had since deducted the fines from the banks' accounts.

The fine plunged MTN shares into all-time low in September until the Nigerian regulator asked authorities of the telecommunication firm to settle the case amicably.

MTN agrees to pay $52.6 million to settle Nigeria's forex repatriation issue – without admission of liability

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