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Saturday, 17th November 2018
7:53:20pm

MTN CEO confident about Nigeria dispute as firm applies for injunction

South African telecoms firm MTN Group said on Monday it was confident a multi-billion dollar dispute with the Nigerian government would be resolved even as it applied for a court injunction to protect its Nigerian assets.

Nigeria’s central bank last month ordered MTN’s Lagos-based unit to hand over $8.1 billion that it said was illegally sent abroad, and the government earlier this month handed MTN with a $2 billion tax bill.

Some industry analysts see Nigerian politics as a factor in the pressure on MTN. President Muhammadu Buhari, who swept to power in 2015 on promises to fight corruption and push through tougher regulation, is seeking re-election in next year’s polls.

“Nigeria, it’s our largest market. We’ve been operating there since 2001,” MTN Chief Executive Rob Shuter told reporters at the ITU Telecom World conference in Durban. “We do have some challenges these past few weeks, but we believe we will be able to make our case and I’m sure we will move past that as soon as we can.”

Nigeria’s main allegation against MTN is that it used improperly issued certificates to convert shareholder loans in its Nigerian unit to preference shares in 2007. As a result, $8.1 billion in dividends paid by MTN Nigeria to its parent between 2007 and 2015 should be returned, the central bank said.

Separately, Nigeria’s Attorney General says MTN Nigeria should have paid approximately $2 billion in taxes relating to imports of foreign equipment and payments to foreign suppliers.

MTN’s latest troubles come about two years after it agreed to pay more than $1 billion to settle a dispute over SIM cards in Nigeria, whose finances have been hit by a weak economy and volatile global oil prices.

MTN, which has expanded in more than 20 frontier markets including war-ravaged Syria and Afghanistan, denies wrongdoing in Nigeria, which accounts for a third of its annual core profit.

On Monday, it said in a statement that it had applied in Nigeria’s Federal High Court for an injunction to restrain the central bank and Attorney General from taking further action while it engages Nigerian authorities.

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

Shuter, who has led MTN since last year, said on Monday that regulatory environments elsewhere in Africa and the Middle East were largely aligned with what MTN wanted to achieve.

MTN’s shares were slightly firm on Monday, trading up 0.4 percent at 1310 GMT.

-Reuters

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