Following a subsisting order from the Central Bank of Nigeria (CBN) to Africa’s telecommunication giant, MTN to repatriate the $8.1 billion allegedly remitted abroad, experts have urged the Federal Government to exercise caution and tact in dealing with the situation.
The financial experts who made their views known in separate interviews with Daily Sun also called on the government to set up an independent panel to investigate the issue with the right group of individuals who will be able to study the tactics of foreign investors and design a method to avoid
cheating or breaching of the rules.
The CBN had said MTN repatriated the money based on illegally issued Certificates of Capital Importation (CCIs) with the ‘connivance’ of Standard Chartered Bank, Stanbic IBTC, Citibank and Diamond Bank between 2007 and 2015.
The apex bank said the transaction was a “flagrant violation of extant laws and regulations of the Federal Republic of Nigeria, including the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 and the Foreign Exchange Manual, 2006.
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Consequently, the four banks were asked to refund various amounts totaling N5.87 billion. Standard Chartered was asked to refund N2.5 billion; Stanbic IBTC (N1.9 billion); Citibank (N1.3 billion) and Diamond Bank (N250 million).
MTN in a reaction to the sanction said it will vigorously defend its position on the issue, describing the sanction as regrettable.
“MTN Nigeria, as a law-abiding citizen of Nigeria, is committed to good governance and to abiding by the extant laws of the Federal Republic of Nigeria.
“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.” The company said.
The telecom giants thereafter disclosed last week that it had applied to the Federal High Court in Lagos for an order restraining the Central Bank of Nigeria and the Attorney General of the Federation and Minister of Justice from taking further actions against it.
The move, according to MTN, is necessary to protect its assets and shareholder rights within the confines of the law and while maintaining its innocence on all the allegations levelled against it, it pledged to continue to engage with the regulatory authorities to clarify the issues of repatriation
of dividends worth $8.1bn and alleged unpaid taxes of $2bn.
Commenting, MTN Nigeria’s Corporate Relations Executive, Tobe Okigbo, said the allegations against the firm were complicated by the uncoordinated approach of the regulators.
He stated, “The allegations being made involve issues that appear to be complex and 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 uncoordinated and at cross purposes.
“The simple reality is that MTN Nigeria has never repatriated dividends on the Certificates of Capital Importation 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 has been done today.”
With this development, it is crystal clear that MTN might delay its listing of its shares on the floor of the Nigerian Stock Exchange (NSE) this year as agreed earlier in January.
Former President, Noble Shareholders Association, Sir Timothy Adesiyan, argued that MTN has made huge money from its investments here and sees no reason for any soft approach from the Federal Government.
“When MTN was penalised years ago over the unregistered sim cards, we bore the brunt as Nigeria paid indirectly through their call and data rates. So before the CBN fined MTN, they would have done some calculations which they can always substantiate in figures and in facts, but the truth still remains that MTN is very clever in the sense that when they are fined for breaching rules, they are deciding a way to recoup whatever is being paid back through different means.
When Nigeria was in recession, we bore the brunt of it, as we did not share what we went through with any country but because something similar is now happening in South Africa, they are indirectly passing it unto us and dogmatically, our government is absorbing it. So there is no need to give them a soft approach or landing as they have been here and are still here, making money.
However this is the right time our country needs to assemble the right group of individuals who will be able to study the tactics of foreign investors and design a method to avoid them cheating us.” he said.
Chief Executive Officer, Cowry Asset Management, Johnson Chukwu, however disagreed with Adesiyan’s view, adding that there is need for dialogue with both parties as well as the Federal Government.
He said, “Both the banks and MTN are disputing that they did not do anything wrong and unfortunately at the same time, the Minister of Justice declared that the company was owing N2 billion and since this did not come from the tax authorities, there is a question mark on its possibility. I think we as a country need to be cautious on how we handle foreign direct investors
and so I think there has to be meeting point somewhere.
Already MTN are very vehement in their denial of any wrong doing, so the FG can set up an
independent panel to investigate this issue.”
According to him, MTN remains the poster boy for foreign portfolio direct investment into the country and so there is a strong need to handle the issue with tact, hence there is no need hurrying to extract that iota of trust away from them.