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Nigeria Central Bank softens stance towards MTN

Nigeria Central Bank softens stance towards MTN

The Central Bank of Nigeria has eased its pressure on MTN Group, causing the operator’s shares to rise more than they have in the past six months.

A statement from Central Bank of Nigeria representative Isaac Okorafor confirmed that further information provided by MTN relating to allegations that the operator had illegally repatriated $8.1 billion could lead to an “equitable resolution” of the dispute. The bank was previously demanding a full refund of the amount; its accusations caused MTN’s share prices to plummet by almost a third.

Okorafor noted that four banks -- Standard Chartered, Citigroup, Stanbic IBTC and Diamond Bank – were providing information about MTN’s transactions that would be reviewed by the Central Bank. Between them, the four have been fined around $16 million for enabling the alleged illicit activity.

The $8.1B refund is not the only payout facing MTN in Nigeria – the group has been hit with a bill for $2 billion in unpaid taxes on imported equipment and supplier payments relating to its operations over the past ten years. This bill, issued by the attorney general, was not mentioned in the Central Bank’s statement.

MTN claims that the allegations by the Central Bank and the attorney general’s office are both baseless and malicious. This is not the first time the company has run into difficult in Nigeria, having incurred a $5.2 billion fine two years ago over its failure to disconnect unregistered SIM cards. On this occasion, it was able to resolve the dispute to all parties’ satisfaction, negotiating the fine down to $1.7 billion.

“While this is a step in the right direction, continued dialogue to reach an amicable resolution is a minimum standard expected by the investment community,” said Olusola Teniola, president of the Association of Telecommunications Companies of Nigeria. “We look forward to the central bank disclosing the exact reasons for their actions.”

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