Nigeria central bank says resolves dispute with MTN

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JOHANNESBURG, December 26 – Nigeria’s central bank said this week it had concluded telecommunications company MTN Nigeria was no longer required to reverse historical dividend payments made to shareholders, but that proceeds from the preference shares in the firm’s private placement remittances of 2008 were irregular.

In August the Central Bank of Nigeria (CBN) alleged that certificates of capital importation (CCIs) issued in respect of the conversion of shareholders loans in MTN Nigeria to preference shares in 2007 had been done improperly and historic dividends repatriated by the company between 2007 and 2015 amounting to U.S.$8.1 billion must be refunded to the Bank.

In a statement dated December 24, the central bank said MTN, led by its Nigerian shareholders, had held intensive engagements with the CBN during which it supplied additional material information not previously offered to the bank, satisfactorily clarifying its remittances.

“Having now reviewed the additional documentation provided by the company, the CBN has concluded that MTNN is no longer required to reverse the historical dividend payments made to MTN Nigeria shareholders,” it said.

“However, the CBN identified that the proceeds from the preference shares in MTNN’s private placement remittances of 2008 were irregular having been based on CCIs that were issued without the final approval of CBN.”

The bank said both parties had “mutually agreed that the aforementioned transaction be reversed notionally to bring it into full compliance with foreign exchange laws and regulations”.

“The parties have resolved that execution of the terms of the agreement will lead to amicable disposal of the pending legal suit between the parties and final resolution of the matter,” it added.

“The CBN assures foreign investors that the integrity of the CCIs issued by authorized dealers remain sacrosanct. Potential investors are encouraged to take advantage of the enormous investment opportunities that abound within Nigeria.”

MTN Nigeria has previously refuted the allegations against its conduct, saying no dividends were declared or paid by the company other than pursuant to certificates of capital importations issued by its bankers and with the approval of the central bank as required by law.

MTN has already faced a hefty fine in Nigeria – its biggest market – over 5.1 million sim cards that were not registered. (ANA)