Senate to probe alleged transfer of $13.9B

September 27, 2016 12:06 PM

The move comes as Nigeria, Africa's biggest economy, is in recession for the first time in more than 20 years.

A customer leaves an MTN shop in Johannesburg, file.

Lawmakers in the upper house of Nigeria's parliament agreed on Tuesday to investigate an allegation that South Africa's MTN, Africa's biggest telecoms company, illegally transferred $13.92 billion out of the West African country.

MTN declined to comment on the decision of the Senate in Nigeria which, with 62 million subscribers, is its biggest market. MTN shares were down by 4.20 percent, at 2.46 pm (13:46 GMT), on Tuesday.

The allegation was made in a motion submitted to the upper house by Senator Dino Melaye which said $13.92 billion had been repatriated "illegally" out of Nigeria by MTN through its bankers between 2006 and 2016.

The investigation threatens to raise tensions between Nigeria and the South African firm just three months after MTN agreed to pay a reduced fine of 330 billion Naira ($1.05 billion) in a settlement with the Nigerian government over unregistered SIM cards.

The upper house agreed that its committee on banking, insurance and other financial institutions would "carry out a holistic investigation into the matter and report back to the Senate".

MTN is the largest mobile phone operator in Nigeria, which accounts for around one third of the company's revenues.

The company had threatened to pull out of Nigeria during the dispute over unregistered SIM cards.