Again, MTN Group’s Shares Slide as Officials Meet with CBN

Shares in MTN Group, Africa’s biggest telecoms company, have dropped more than four per cent over the uncertainty about the outcome of yesterday’s meeting between the Central Bank of Nigeria (CBN), officials of CBN, and the four banks involved in the alleged MTN’s illegal repatriation of $8.134 funds from Nigeria.

According to report, the shares further droppeåd yesterday by 2.21 per cent at 84.10 rand over uncertainty about the outcome of the meeting. The MTN Group shares had on Monday rose by 2.55 per cent, following the announcement on Sunday by the CBN Governor, Mr. Godwin Emefiele, of the plans by the apex bank to reduce the $8.134 billion fines.

But the shares, it was gathered, plunged again, as a result of the uncertainty about the outcome of the meeting which held yesterday in Abuja.  The CBN met with the representatives of the telecommunications company MTN and banks, to discuss the dispute over the repatriation of $8.134 billion, two sources with direct knowledge of the matter told Reuters.

The dispute is over the transfer of $8.134 billion of funds which the CBN said the company had sent abroad in breach of foreign-exchange regulations. Nigeria, which accounts for a third of the South African company’s annual core profit, is MTN’s biggest market. 

Sources who preferred to remain anonymous, said executives from MTN and the four lenders involved in the case – Standard Chartered, Stanbic IBTC Bank, Citibank and Diamond Bank – held talks with the CBN.  MTN declined to comment and on the meeting and the Central Bank’s spokesman did not respond to a text mesage and phone calls requesting for the outcome of the meeting. The stock has lost around 20 per cent since the demand by Nigeria’s central bank on August 29.  The apex bank said the funds had been illegally moved abroad because the company’s bankers had failed to verify if MTN had met all the foreign exchange regulations.

However,  MTN had denied the allegations. 

Emefiele had said that the CBN received documents from MTN and the four banks involved in the case, and that the apex bank would examine the documents and come out with a position that may lead to the reduction of the $8.134 billion that was said to have been repatriated, which CBN ordered MTN to refund.

MTN Nigeria had in 2015, pledged to list its shares on the Nigerian Stock Exchange after it was fined N1.04 trillion for its failure to disconnect improperly registered SIM cards on its network. Although the fine was later reduced to N330 billion after several plea bargain from MTN, and about N165 billion has so far been paid by MTN, the company however said last month that it was considering alternative ways to trade the stock in Lagos.

Bloomberg report quoted the Chief Financial Officer (CFO) of MTN Group, Ralph Mupita, in an interview in Johannesburg, as saying that MTN is looking at other ways to trade the stock in Lagos, including a so-called introduction, in which existing shares are listed. MTN’s board still needs to make a final decision, Mupita said, adding that MTN’s Nigerian shares already trade over the counter. 

The reason for the twist is not unconnected with the CBN order that MTN should refund as much as $8.134 billion that it allegedly repatriated from Nigeria, between 2007 and 2015, coupled with the $2 billion tax areas that the Attorney General of the federation has asked the same MTN to pay. MTN had since denied any wrong doing in both instances and had gone to court to challenge the both orders.

SOURCE: THIS DAY

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