Nigeria: Senate Moves Against Govt Over Alleged Plan to Reduce MTN's $8.1bn Fine to $800m

MTN Nigeria
13 November 2018

Abuja — Strong indications emerged Tuesday that there is stiff opposition against alleged arrangements by the Federal Government to reduce the $8.1 billion fine imposed on the communication giant, MTN, to $800 million.

The alleged planned reduction of the fine is a matter of interest to the Senate since it was the executive that imposed the fine on the communication giant through a fresh investigation after one earlier conducted by the Senate in 2016 from which the Central Bank of Nigeria ( CBN) and not MTN was fined, adding that though it was not particularly against whatever the government would want to do with the MTN fine, it should be intimated why the reduction became necessary.

The fight is gathering momentum in the Senate as disclosed yesterday by the Chairman, Senate Committee on Banking , Insurance and other Financial Institutions , Senator Rafiu Ibrahim ( PDP Kwara South) during an interview with journalists .

Senator Ibrahim who noted that the Committee would immediately demand for CBN report on the matter to be better informed, said that the only way Nigerians would know what transpired between the CBN and MTN on the $8.1 billion fine was through a detailed report.

It was gathered that the Federal Government, working through the Central Bank of Nigeria (CBN), may have concluded arrangements to cut the $8.1 billion fine to $800 million through the back door, just as the Senate stressed that the planned reduction of the fine was a matter of interest to it.

According to the Senate, how the percentage of reduction from $8.1 billion to $800 million was arrived at was of interest to it, adding that it was equally interested to know what informed the penalty of $8.1 billion in the first instance.

Senator Ibrahim said, "The last time we heard about this issue was when we had a little retreat last two weeks in Lagos, where they (CBN) did the presentation of their biannual activities to the committee (Senate Committee).

"We took them up on the issue, and the bank, that's the CBN told us what led to its own investigation which to us is not satisfactory because all our resolutions were passed to them, and they did not even implement the resolutions before going into another investigation.

"They said their investigation was based on a petition from a law firm and their stand was that the penalty was correct. So, if from the information you have now, it will be ridiculous for them to say they're bringing the penalty down from $8.1bn to about $800m. That will be ridiculous for the CBN.

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"What they told us that day was that they were going to give us the report from when they started the investigation to date and their discussion with MTN. So, if that's the case, they have to explain to Nigerians through us in the Senate Committee to the legislature, what informed the penalty of $8.1bn?

"And what information have they now gathered that informed the reduction to $800m which is about 1000% reduction. So, we will be interested to know that. We're not against whatever they're doing, but they will have to explain to Nigerians. Did they take the decision they took against MTN in a hurry, a foreign direct investor like MTN?

It would be recalled that the Senate in 2017 adopted a resolution largely exonerating MTN of alleged illegal repatriation $14 billion out of the country.

Ibrahim who noted that his committee would immediately demand for CBN's report on the matter to be better informed, said that the only way Nigerians would know what transpired between the CBN and MTN on the $8.1 billion fine was through a detailed report, adding, "That's why we did a very thorough job, and we believe we did a thorough job, that they did not steal any money then, that was our own assertion, though they repatriated.

"By then, CBN said all the places where some infractions to the law or guidelines where they gave them waivers. That was our position. So, we will be interested in the investigation. We want to know what informed this decision. We as a committee and as a Senate will be interested. They will have to explain. As I sit here, I believe it may not be true. If it is close to the truth, then they will have to explain to Nigerians."

Asked if the committee is likely to take up the matter, Senator Ibrahim said: "Definitely, I will call the Clerk to ask them that we are expecting their report as promised in the retreat. "In the report, if we find anything close to this, I will let you know. We will write them and probably give ultimatum for the report. This is a very sensitive thing to the economy.

"All of us know they (MTN) committed a lot of resources in Nigeria; so we don't want them to be used as a yardstick as to how the Nigerian government treats investors.

"The Senate adopted a report last year largely exonerating MTN of alleged illegal repatriation of $14 billion out of the country.

The upper chamber also asked the CBN to sanction Stanbic IBTC Bank "for improper documentations in respect of capital repatriation and loan repayments" on behalf of MTN.

This followed the consideration of the report of its committee on Banking, Insurance and other Financial Institutions which investigated alleged unlawful repatriation of $13.92 billion from Nigeria.

MTN accepted the Senate report saying: "We welcome the report. We will study it in more detail. As we've placed on record previously, we have always insisted that our actions have been compliant with the law in this regard."

Also recall that the Senate had said that the apex bank's failure to properly regulate foreign exchange should be condemned, even as it asked the bank to propose amendments to current regulation to foster economic growth and improve Nigeria's foreign currency inflows.

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