MTN fight for Nige­rian as­sets

Africa’s big­gest tele­coms com­pany to ap­proach the high court for in­junc­tive re­lief

The Mercury - - FRONT PAGE -

DINEO FAKU MTN, AFRICA’S big­gest tele­coms com­pany, yes­ter­day moved to pro­tect its as­sets in Nige­ria on be­half of its stake­hold­ers, say­ing that it had de­cided to ap­proach the coun­try’s courts to re­strain au­thor­i­ties from tak­ing fur­ther ac­tion against it.

MTN said it had ap­plied to the Fed­eral High Court of Nige­ria for an in­junc­tive re­lief against the Cen­tral Bank of Nige­ria (CBN) and the at­tor­ney-gen­eral of the Fed­eral Repub­lic of Nige­ria (AFG).

The de­ci­sion came af­ter the com­pany’s stock tanked sig­nif­i­cantly last month when the CBN de­manded that it put an $8.1 bil­lion (R123.29bn) re­fund for al­legedly il­le­gally tak­ing money out of that coun­try.

The CBN also re­port­edly fined four of the coun­try’s banks for their part in help­ing il­le­gally send $8.134bn out of the coun­try, in breach of for­eign ex­change reg­u­la­tions.

To add to MTN’s woes, the AFG last week or­dered that it pay $2bn in un­paid taxes for for­eign im­ports.

The com­pany has de­nied both al­le­ga­tions, say­ing that it would con­tinue to de­fend its po­si­tion.

“We re­main res­o­lute that MTN Nige­ria has not com­mit­ted any of­fences and will con­tinue to vig­or­ously de­fend its po­si­tion,” the com­pany said in a state­ment yes­ter­day.

In 2015 Nige­rian au­thor­i­ties slapped MTN with a $5.2bn fine for miss­ing the dead­line to dis­con­nect 5.1 mil­lion sub­scribers with un­reg­is­tered SIM cards.

The fine led to a mas­sive sell-off in MTN stock.

It also saw the telecom­mu­ni­ca­tions firm bleed­ing cash and record­ing sub­stan­tive losses in sub­se­quent re­port­ing pe­ri­ods as un­cer­tainty over the com­pany’s vi­a­bil­ity per­sisted.

The lat­est fall­out be­tween MTN, AFG and CBN has seen in­ter­na­tional rat­ings agency Moody’s plac­ing MTN on re­view.

Moody’s last week said un­cer­tainty around the po­ten­tial im­pli­ca­tions of the re­cent CBN and NAG an­nounce­ments on MTN’s credit pro­file could spark a down­grade.

“MTN’s man­age­ment has in­di­cated that both al­le­ga­tions are with­out merit and they will be en­gag­ing with the rel­e­vant au­thor­i­ties,” Moody’s said.

Peter Takaen­desa, a port­fo­lio man­ager at Mer­gence In­vest­ment Man­agers, yes­ter­day de­scribed MTN’s de­ci­sion to ap­proach the courts as nec­es­sary to pro­tect its in­ter­ests.

Takaen­desa also said that the business needed to con­tinue op­er­at­ing, and this re­quired MTN Nige­ria to con­tinue to have full ac­cess to its op­er­at­ing as­sets.

“The un­prece­dented amounts be­ing de­manded by the Nige­rian au­thor­i­ties would crip­ple MTN Nige­ria if set­tled as de­manded,” he con­cluded.

MTN shares de­clined 0.9 per­cent on the JSE yes­ter­day to close at R74.


TELE­COMS IN­DUS­TRY PLAYER Pres­i­dent Cyril Ramaphosa ad­dresses the ITU Tele­com World 2018 open­ing at the iNkosi Al­bert Luthuli In­ter­na­tional Con­ven­tion Cen­tre in Dur­ban. ITU Tele­com World is an an­nual ex­hi­bi­tion and fo­rum for gov­ern­ment and in­dus­try lead­ers.

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