MTN Nigeria in trouble again

MTN Group shares have slumped as it’s again accused of graft.

Still reeling from its record fine last year, MTN is again accused of corruption in Nigeria.

MTN Group shares have slumped the most in three months on news Nigerian lawmakers have raised new allegations about the cellphone company, this time accusing it of illegally moving almost $14 billion out of its largest market.

Nigeria’s Senate will thoroughly investigate the claim, it said on its Twitter account yesterday.

‘10-year scam’

The Johannesburg-based company, Africa’s biggest wireless carrier by sales, is accused of repatriating the funds over 10 years starting in 2006, according to Dino Melaye, the politician who made the motion.

The four banks involved in the alleged illegal transfers are Citigroup, Standard Chartered, and Nigerian lenders Stanbic IBTC Holdings and Diamond Bank.

Representatives for MTN and two of the banks weren’t available to comment. Citigroup and Johannesburg-based Standard Bank Group, which controls Stanbic, declined to comment.

MTN shares fell as much as 4.4%, what would be the biggest fall on a closing basis since June 27, and traded 3.4% lower at R119.77 as of 1.32pm in Johannesburg. That values the company at R221 billion ($16.3 billion).

The accusation comes a little over three months after MTN agreed to pay a 330 billion naira (R13.53 billion) fine in cash to the Nigerian government and list its local unit on the country’s stock exchange after about eight months of negotiations.

That penalty was levied for missing a deadline to disconnect 5.1 million customers unregistered in the country, which is battling an Islamic insurgency.

The stock has fallen more than 37% since the fine was first reported in October, allowing crosstown rival Vodacom Group to overtake the company in terms of market valuation.

“It’s not good for MTN that there is noise being made again around corporate governance,” Sasha Naryshkine, an analyst at Johannesburg-based money manager Vestact, said by phone. “It’s hard to move money out of the country illegally as it has to go through the central bank.”

MTN shares had fallen earlier yesterday after the Nigerian telecommunications regulator blocked the carrier’s attempt to take over internet spectrum owned by Visafone, which it had agreed to buy in January.

In the dumps

MTN is trying to add capacity to extend internet access in Nigeria and South Africa as revenue from voice services declines.

“It’s one mess after the other for MTN in Nigeria again today,” Naryshkine said. – Bloomberg