MTN shares crash 23% on USD$8bn demand from Nige­ria

Zambian Business Times - - BUSINESS REVIEW -

• The telco was al­leged to have il­le­gally repa­tri­ated USD$8.1bn be­tween 2007 and 2015 out of Nige­ria

MTN’s share price crashed 23% and Stan­dard Bank’s share price fell 3.4% to­day morn­ing af­ter they con­firmed the Nige­rian cen­tral bank had or­dered them to re­turn bil­lions it claimed had been taken out of the coun­try il­le­gally.

MTN’s share price fell to USD5.9 (R83.06) af­ter it con­firmed it had re­ceived a letter from Cen­tral Bank Nige­ria (CBN) al­leg­ing it had il­le­gally repa­tri­ated $8.1bn be­tween 2007 and 2015.

Stan­dard Bank is­sued a state­ment on Thurs­day morn­ing say­ing it had re­ceived a demand from the cen­tral bank for $2.632bn, which its Nige­rian sub­sidiary had is­sued in for­eign ex­change to MTN.

Stan­dard Bank said it also faces a fine of $5.2m (about R75m) for vi­o­lat­ing for­eign ex­change laws.

Ves­tact port­fo­lio man­ager Michael Tre­herne said that from the out­side, “it looks like a bit of a witch-hunt”.

“MTN was us­ing nu­mer­ous banks, so ba­si­cally what [the cen­tral bank] is in­sin­u­at­ing is that MTN was col­lud­ing with mul­ti­ple in­ter­na­tional or­gan­i­sa­tions to do this, which seems highly un­likely…. And as MTN points out in their an­nounce­ment, the se­nate said there were no foul deal­ings in their own in­ves­ti­ga­tions.”

If MTN were to lose this bat­tle, Tre­herne said the group would have to bor­row cash to send to its Nige­rian busi­ness, and the cash would then be locked up in that coun­try.

The group would have to pay in­ter­est “on a loan it doesn’t need” and would also be ex­posed to cur­rency risks.

Reuters re­ported late on Wed­nes­day that Nige­ria’s cen­tral bank had or­dered four banks to re­turn the funds that MTN il­le­gally sent out of the coun­try in breach of for­eign ex­change reg­u­la­tions.

Stan­dard Bank Group said it would en­gage with Nige­ria cen­tral bank on the mat­ter.

MTN re­jected the claims on Thurs­day morn­ing, say­ing the mat­ter was ear­lier in­ves­ti­gated by the Nige­rian au­thor­i­ties, which found no ev­i­dence of wrong­do­ing on the part of the com­pany.

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