Embattled Telecom giant, MTN Nigeria has been in the eye of the storm in the past two years.
In 2015, it incurred the wrath of the Nigerian Communications Commission, NCC, which slammed an unprecedented fine of N1.04 trillion against it.
The fine was related to alleged infractions it committed on Subscriber Identity Module, SIM card registration.
The uproar generated by that fine, lasted for several months, resulting into litigations both for and against the company and federal government of Nigeria. It also distracted activities in the Information and Communications Technology, ICT sector, negatively impacted on ICT's contribution to the GDP and to an extent, drew the wheel of progress in the sector backwards.
Although the issue was resolved after MTN admitted culpability and apologized, some conditions were attached for MTN to fulfil, consequent upon reducing the fine to N330 billion with a staggered payment structure.
Even with all that consideration, MTN, however, has not been able to either recover from the effect of the fine or clear the payments till today
In 2016, the company was again assailed, in another allegation of illegally repatriating $13.92billion by Senator Dino Melaye, (APC Kogi).
Part of the allegation was that: "MTN, facilitated by some banks and Minister of Trade & Investments, Dr Okechukwu Enelamah fraudulently exported up to $13.92billion out of Nigeria as payments to shareholders and other offshore Special purpose vehicles, SPVs, owned by its shareholders between 2001 and 2006.
"That the purported repatriations were fraudulent because of alleged non-compliance with statutory requirements relating to: The issuance of Certificates of Capital Importation, CCI, within 24 hours of capital importation and/or CBN approvals; The exportation of foreign exchange as dividends and the creation of SPVs domiciled in off-shore tax havens allegedly to circumvent local laws
However, MTN refuted all allegations, claiming that its activities were guided by a comprehensive governance framework and an unequivocal Code of Conduct put in place to ensure compliance with the highest ethical standards, as well as full observance of local laws, policies and directives.
In its defence, it claimed that all capital imported into Nigeria were covered by requisite CCIs issued by the relevant bank as required by law, within 24 hours of importation and that where it was not possible within 24 hours due to operational and other challenges, the banks concerned duly sought and secured approval of the CBN as required by law.
It also maintained that all dividend payments it repatriated were done in respect of legitimate investments and in accordance with extant law.
MTN also claimed that when invited, it duly provided all relevant documentation demanded by the Senate Committee on banking, Insurance and other financial institutions and co-operated with the Committee in its investigations.
MTN's defence also followed Enelamah's total denial of involvement howsoever in the repatriation process of MTN whether legal or illegal.
In September 2016 the Senate agreed to investigate if the telecoms firm unlawfully repatriated the said amount from Nigeria.
However, a report a report of the investigation was first presented to the Senate in July, 2017 exonerating MTN of wrong doing but the Senate immediately withdrew it and asked the committee to do more work on the report because it did not capture possible infractions by all stakeholders.
But sometime in November of that year, Vanguard gathered, that the upper chamber of the National Assembly eventually approved the report but requested Central Bank of Nigeria, CBN, to sanction Stanbic IBTC Bank "for improper documentations in respect of capital repatriation and loan repayments" on behalf of MTN.
The senate investigation was reported not to have seen proof of collusion to contravene Nigeria's foreign exchange laws.
According to the report, "There was evidence of massive capital outflow but that fact alone is not conclusive that a crime has been committed,"
The senate committee also said that CBN's failure to properly regulate foreign exchange should be condemned. The report challenged the Apex bank to propose amendments to current regulation to foster economic growth and improve Nigeria's foreign currency inflows.
MTN's reprieve in this matter, did not last long as the Nigerian Labour Congress, NLC in July 2018 hit the telco with massive picketing exercise covering almost all its offices in the country.
NLC and its affiliates crippled activities of MTN nationwide over alleged unfair labour practices, including casualisation of workers and refusal to allow workers join union, contrary the Trade Union Act and section 40 of the Nigeria's constitution.
Although MTN also denied the allegations in all entirety, it did not come off it without burnt fingers as it complained having lost a whopping N12 billion in the four days that the picketing lasted.
As if the company is permanently set in the line of fire, the central bank of Nigeria, CBN and the Attorney General of the federation, AGF, recently released a double cannon on the telco.
While CBN accused it of illegally repatriating $8.1 billion which must be returned to the coffers of the federal government, the AGF alleged that the telco had evaded tax to the tune of $2.0 billion.
As usual, MTN had categorically denied all allegations, saying it has always complied with and carried out all its taxes and financial obligations to the Nigerian government, dutifully
It has also gone to court, seeking injunction to restrain them from taking further action in respect of their orders to reclaim the alleged debts
The telecommunications company told Hi-Tech that apart from the need to protect its assets and shareholder rights within the confines of the law, one of the major reasons it went to court was the ambiguity of the claims and the inconsistency in the positions of the two authorities making the claims. MTN argues that it is confusing when CBN is pressurising it to refund $8.1billion when four commercial banks were issued fines in respect of the administration of the CCI and irregular dividend repatriation and requested to return, in aggregate, the same $8.1 billion.
It also said the two authorities were not clear on where and through whom the money should be paid, were it necessary to be paid as the CBN and AGF directives were in conflict with each other.
Corporate Relations Executive of MTN Nigeria Mr Tobe Okigbo said: "The allegations being made involve issues that appear to be complex and so are easily misunderstood and misinterpreted. They are made even more confusing when the relevant authorities send conflicting messages and instructions and act in a way that appears un-coordinated and at cross purposes.
"The Attorney General while communicating us has directed that the payment of the $8.1 billion is dealt with through his office rather than as directed by the CBN.
"The simple reality is that MTN Nigeria has never repatriated dividends on the CCIs referenced by the CBN and that MTN is fully compliant with Nigerian tax law. With situations like this, it is vital for both the government, regulators and the company to have absolute clarity on the nature of both the allegations being made and the processes that are being followed. In the absence of this clarity, our only option is to seek judicial intervention and to ask the courts to act as adjudicator. This is why we went to court" , he added.
Meanwhile, the weight of these allegations has thrown the ICT industry into another round of confusion because the implications to the company and to the economy of the country, if not well managed, could affect the growth recorded in the industry in the past two decades.
Why FG should thread softly
Although the Executive Vice Chairman of the Nigerian Communications Commission, NCC and some other ICT industry stakeholders have sued for amicable resolution of the issue between the CBN, AGF and MTN, there are fears that the combo of these cases and the distractions they could bring, may set MTN's investments, operations back and snowball into revenue loss which would also affect the economy generally
The stakeholders argue that for a country planning to rebuild its economy on the strength of technology, frustrating the business environment of its biggest operator may be antithetical to progress.
Why the distractions could impact business negatively
The first report of the allegation went to the Directorate of Security Services, DSS, who also invited MTN Nigeria. Later it was debated at the floor of the Senate where it was later transferred to the Senate Committee on Banking Insurance and other financial institutions.
The NLC case recorded world attention and the recent issue is a subject of litigation and all have been followed with different shades of opinions and reports in the media.
Obviously, the nature of the allegations and its sensational reportage are capable of significantly impacting the company's market prospects and its sustainability in Nigeria.
In fact, Vanguard investigations reveal that the situation has deeply impacted investor confidence, not just in the telecoms industry, but in the Nigerian economy as a whole.
Most unfortunately is Vanguard's discovery that MTN's efforts to list shares on the Nigerian Stock Exchange, is particularly impacted.
Recall that the Nigerian Communications Commission, NCC, had mandated that MTN lists in the Nigerian Stock Exchange as part of the considerations for reducing the N1.04 trillion fine on the company in 2015 to N330 billion.
The fine was related to alleged inability of the company to disconnect over 5.2 million improperly registered subscribers on its network within government's stipulated time.
Why MTN is important to Nigeria
Arguably, since MTN entered into the Nigerian telecommunications market in 2001, it has played a catalytic role in the industry, challenging its peers and stimulating healthy competition in the sector.
Clearly the leader in terms of market share, coverage and number of connections, the company has positioned itself as a critical enabler of socio-economic growth in Nigeria. Vanguard's investigations show that:
With more than $16 billion invested in the economy thus far, MTN is Nigeria's largest provider of access to communication services and ICT solutions.
Its network is providing coverage to over 3,800 cities, towns and villages nationwide, offering some innovative products and services that have transformed the way the people live, work and play.
It is connecting over 60 million people living in Nigeria, enabling them start, build and maintain relationships.
MTN could be considered a critical enabler of businesses with network providing broadband access through 11,800 sites deployed across the nation.
It has also recently launched 4G LTE, a new generation technology considered the fastest wireless internet connection available today. This technology, if well harnessed could deliver a multitude of socio-economic benefits to Nigerians.
The statistics available to Vanguard also reveal that MTN Foundation has spent N16 billion on social investment projects in Education, Health & Economic Empowerment, touching lives of over four million people even in rural Nigerian communities through these social investments.
Infrastructure investments and employments
From available statistics MTN has directly and indirectly provide employment to over 500,000 Nigerians who ordinarily would be roaming the street, bloating the labour market and most probably could constitute social disorder.
Again, between the period of the alleged repatriation (2001 and 2006) MTN' claim of having its shareholders imported more than US$ 400 million, (approximately ¦ 65 billion) into the country for investment, has not been disputed.
In addition to the initial capital it claimed to have imported, it has also evidently continued to contribute to the growth and development of the Nigerian economy.
For example, a telecom engineer who said he has been a strong member of the company's engineering team despite not directly working in the company, told Vanguard that to his knowledge, the company has invested over N1.8trillion in infrastructure and other services, paid over N1.7 trillion to government by way of taxes, levies and sundry regulatory payments, and disbursed around ¦ 200 billion in salaries to the over 2000 Nigerians that have been employed by the Company.
If these statistics are anything to go by, it would only be unfair to say that MTN and its shareholders have depleted the country's external reserves, rather they have contributed significantly to the Nigerian economy, investing three to four times more in the country than has been repatriated as dividend payments.
However, there is need to critically resolve these matters and speedily too, in order not to encourage infractions or kill the goose that lays the golden egg.