MTN’s woes in Nigeria could get even worse after the country’s Central Bank indicated that the operator would owe interest on the $8.1 billion that it is accused of illegally repatriating.
Court documents seen by Bloomberg indicate that the bank would charge interest on the sum at a rate of 15% annually until MTN has relinquished the entire $8.1 billion. The claims, which MTN “strongly refuted”, are currently under review by Nigerian courts.
In August this year, the Central Bank demanded the repayment of the full amount on the grounds that MTN had not received the requisite approvals for the repatriation of its dividends between 2007 and 2015. MTN has applied for an injunction in an attempt to stall the timeline for repayment so it can fight back against the charges – a move which the Central Bank objects to.
Towards the end of September, Central Bank of Nigeria representative Isaac Okorafor indicated that new information related to the allegations had come to light, making an “equitable resolution” more likely.
However, this latest pronouncement suggests that the Central Bank is taking a more hard-line approach to MTN’s alleged infraction, with Bloomberg noting that it considers the repatriation of funds to be “contrived as a scam to make and maximise profits” and “enjoy unlimited foreign-exchange income perpetually from a single investment without complying with the foreign exchange laws and regulations of Nigeria”.
The alleged illegal repatriation is just one issue faced by MTN in Nigeria, with the operator also disputing a $2 billion tax bill. The group’s stock price in South Africa has fallen significantly as a result of these cases, and has forced the operator to rethink its plans for an IPO in Nigeria.