The banking industry would hold its regular Bankers Committee meeting soon to discuss MTN’s repayment of $8.1 billion on the orders of the CBN.
– As share price plunge on J’Burg Exchange
Chinenye Anuforo and Chiwendu Obienyi
Chief executives of commercial banks in the country may have initiated moves to stave off the collateral consequences of MTN Nigeria’s, refund of $8.1billion, said to have been illegally repatriated by it in over nine years.
Access Bank Chief Executive, Herbert Wigwe, who gave the hint to Reuters, Thursday said although his bank has a minor holding at MTN group level and was not exposed to the telecoms firm in Nigeria, the banking industry would hold its regular Bankers Committee meeting soon to discuss MTN’s repayment of $8.1 billion, on the orders of the CBN.
Wigwe said he expected a resolution on the matter as the regulator would want to avoid a systemic banking crisis given that the repayment of $8.1 billion, which is about half of MTN’s market capitalisation could threaten its Nigerian bankers.
Separately, Access Bank and other lenders to 9mobile have taken a 25 percent loan loss as part of sale negotiations with new investor Teleology Holdings, he told an analysts’ call
Nigerian bank chiefs usually hold regular consultative policy meetings with the Central Bank of Nigeria where critical decisions bordering on safe operating environment are discussed.
This was as MTN Nigeria yesterday, stated that all dividends paid to its shareholders between 2007 and 2015 were approved by the Central Bank of Nigeria (CBN).
Reacting to Wednesday’s sanction by the CBN that it illegally converted shareholder loans to preference shares and repatriated $8.1 billion as dividends during the period under scrutiny, the firm stated “MTN Nigeria strongly refutes these allegations and claims. No dividends have been declared or paid by MTN Nigeria other than pursuant to CCIs issued by our bankers and with the approval of the CBN as required by law.
The company however assured it would “engage with the relevant authorities and vigorously defend our position on this matter and provide further information when available”.
In 2015, the Nigerian government fined MTN N1 trillion for failing to deactivate unregistered lines, but the penalty was negotiated down to N330 billion out of which Abubakar Malami, the attorney-general of the federation, said his ministry paid N500 million to lawyers for helping with negotiations.
Meanwhile, the shares of the company took a hit on the Johannesburg Stock Exchange after news of the sanctions broke on Wednesday.
Early trading on the Johannesburg Stock Exchange saw the shares dip to 86.99 rand, a drop of 18 percent and its lowest level since March 2009.
The telecommunications company’s shares fell 14 percent after the CBN fined four banks a total of N5.86 billion for allegedly issuing irregular certificates of capital importation to MTN Nigeria. The affected banks include Citibank, Diamond Bank, Stanbic IBTC Nigeria and Standard Chartered Bank.
Commenting on the sanction in a statement released on Thursday, MTN said it has affected investor confidence.
“The re-emergence of these issues is regrettable as it damages investor confidence and, by extension, inhibits the growth and development of the Nigerian economy,” it said.
Stanbic IBTC has also released a statement assuring customers of stability in its operations.
“The bank is holding further engagements with the CBN, in relation to the issues it has raised,” it said.
This was as investors on the floor of the Nigerian Stock Exchange (NSE) yesterday pulled away the profits on the shares of ten banks with trading closing on a negative note, with the All-Share Index (ASI) dropping 0.77 percent to close at 35,086.69 points just as market capitalisation depreciated by N99 billion to close at 12.809 trillion from N12.908 trillion previously.