As the news broke Wednesday that MTN Nigeria has once more been penalised by another regulator in Nigeria, industry watchers have been wondering if the telecom giant will be able to overcome the challenges it has been faced with in the country.
Precisely, the Central Bank of Nigeria (CBN) has asked MTN Nigeria and four banks which it also sanctioned alongside the telecom company to "immediately refund the sum of $8,134,312,397.63, illegally repatriated by the telecoms company to the coffers of the Central Bank of Nigeria".
The four banks also fined a total of N5.87 billion by the Nigerian banking sector regulator were Standard Chartered Bank, Citibank Nigeria, Stanbic IBTC and Diamond Bank Plc, over what the CBN described as flagrant violation of extant laws and regulations of the Federal Republic of Nigeria, including the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 of the Federal Republic of Nigeria and the Foreign Exchange Manual, 2006
The CBN order on MTN is coming at a time when MTN Nigeria is still struggling to complete payment of the N1.04 trillion fine imposed on it in 2015, by the telecoms industry regulator, the Nigerian Communications Commission (NCC), for violation of SIM card registration order.
Although the whopping N1.04 trillion was later reduced to N330 billion after several plea bargain from MTN Nigeria, and the payment plan staggered and spread within a period of four years, MTN is yet to complete the payment, before incurring the recent fine from CBN.
Telecoms industry stakeholders are concerned about the current CBN order on MTN and the four deposit banks to refund $8,134,312,397.63, illegally repatriated by the telecoms company to the coffers of the Central Bank of Nigeria. They are afraid if such refund, coupled with the N330 billion that MTN is still battling to pay the telecoms regulator, will not eventually knock the telecoms company out of business. They are also worried and asking questions, why MTN Nigeria is always involved in unwholesome issues that attract the penalty of huge financial fines.
Announcing the decision, CBN's Director, Corporate Communications, Isaac Okorafor, said the actions of the Bank became necessary following allegations of remittance of foreign exchange (FX) with irregular Certificates of Capital Importation (CCIs) issued on behalf of some offshore investors of MTN Nigeria Communications Limited and subsequent investigations carried out by the apex bank in March 2018.
The CBN spokesman further disclosed that the decision of the Bank followed thorough investigations by it into the allegations of remittances by the four banks of forex with irregular CCIs issued on behalf of some offshore investors of MTN Nigeria Communications Limited.
Giving clarifications on the payment of the MTN fine imposed on it by the NCC, the Executive Vice Chairman of NCC, Prof. Umar Garba Danbatta, had said MTN was meeting up with the payment agreement plan for installment-based payment. So far it has paid N165 billion, which is 50 per cent of the total fine of N330 billion.
MTN is due to pay another N55 billion by December this year and will complete payment by 2019.
NCC had in October 2015, fined MTN a whopping N1.04 trillion for its failure to disconnect 5.2 million improperly registered SIM cards on its network within the prescribed deadline. After much plea on the part of MTN management for a reduction in the fine, it was subsequently reduced by 25 per cent to N780 billion, an amount that MTN considered still inimical to the survival of its telecoms business.
MTN Nigeria subsequently sought judicial determination as a means of protecting the local ecosystems valued and supported by MTN's business, but later withdrew the case and continued with its plea bargain, which eventually led to further reduction of the fine to N330 billion and the payment spread in six tranches in four years.
Berating government and the NCC for its harsh stand on MTN Nigeria over the N1.04 trillion fine in 2015, the former President of the Association of Telecoms Companies of Nigeria (ATCON), Mr. Lanre Ajayi, blamed President Muhammadu Buhari's administration for the manner in which it handled the MTN fine that was imposed on the telecoms company in October 2015 by NCC, the telecoms industry regulator.
According to him, the NCC was in a hurry to impose a whopping N1.04 trillion fine on a single company that has contributed so much to the country's GDP in terms of job creation and employment. He said he expected the President Buhari-led government to handle the matter in a better way, but explained that he was surprised at government's initial position that the fine be paid in full. Ajayi said the fine was outrageous in the first place and could ground the operations of MTN, if compelled to pay. He warned that the action of Buhari's government over the fine since it was imposed on MTN, could send wrong signals to foreign investors who want to invest in the country, and called on government to think of better ways of reaching amicable resolution on the matter.
Juxtaposing the argument of Ajayi in the recent CBN refund order on MTN and the four deposit banks, industry stakeholders are of the view that the fines hanging over MTN Nigeria could mar its telecoms business in Nigeria.
Read the original article on This Day.
How MTN, Four Banks Perpetrated $8.13 Illegal Deal, By CBN
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