MTN cleans house

Em­bat­tled cell­phone com­pany records its first loss in 20 years as the ef­fect of its bun­gled Nige­rian op­er­a­tions fi­nally reaches its bot­tom line

CityPress - - Business - JUSTIN BROWN justin.brown@city­press.co.za

MTN is fairly con­fi­dent it won’t have any fur­ther dis­as­trous run-ins with the law in the 22 coun­tries it op­er­ates in af­ter pay­ing a record multi­bil­lion­rand fine in Nige­ria and suf­fer­ing its first loss in 20 years. Phuthuma Nh­leko, MTN ex­ec­u­tive chair­man, said this week: “We made a con­certed ef­fort to en­sure, af­ter the Nige­rian sit­u­a­tion, that we – within rea­son – turned ev­ery sin­gle op­er­a­tion up­side down in terms of com­pli­ance as best as we can. It has been costly be­cause we had to dis­con­nect sub­scribers and just take a very, very con­ser­va­tive view.

“There is noth­ing – that we are aware of – that is a big reg­u­la­tory is­sue. Could some­thing pop up? There are 22 op­er­a­tions – you can never say that some­thing won’t emerge some­where. But, hope­fully, it is noth­ing of ma­te­ri­al­ity.”

How­ever, MTN has come un­der fire over its use of trans­fer pric­ing.

“We have charged man­age­ment fees like many multi­na­tional com­pa­nies do. The most im­por­tant point, those man­age­ment fees that have been charged need to be demon­strated to hav­ing sub­stance [so that we] don’t have [a] case where some­one is say­ing that you are charg­ing man­age­ment fees that are not jus­ti­fied by the value you bring to the coun­try. Does it get queried? Yes, it does get queried,” Nh­leko said.

Last year, MTN was hit with al­le­ga­tions of money laun­der­ing of up to $14 bil­lion by the Nige­rian gov­ern­ment. The group has ve­he­mently de­nied these al­le­ga­tions.

“We are clear that there is ab­so­lutely no ba­sis for any chal­lenge to the repa­tri­a­tions that we had out of Nige­ria over the years,” Nh­leko said this week.

For 2016, MTN re­ported a loss of R3.1 bil­lion, its first loss since

PHOTO: AP

RES­CUE MIS­SION Mem­bers of the Span­ish NGO Proac­tiva Open Arms on Thurs­day help refugees and mi­grants from African and Asian coun­tries who left Libya aboard an over­crowded wooden boat in an at­tempt to reach Europe, which is 22km north of Sabratha, Libya

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