MTN’s shares have tumbled 15% on allegations from the Central Bank of Nigeria that $8.1 billion worth of historic dividends needs to be ‘repatriated’ and returned to the country.
The group said that it received a letter on 29 August 2018 from the central bank alleging that certificates of capital importation (CCIs) issued in respect of the conversion of shareholders loans in MTN Nigeria to preference shares in 2007 had been improperly issued.
As a consequence, the bank claims that historic dividends repatriated by MTN Nigeria between 2007 and 2015 amounting to $8.1 billion need to be refunded.
“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 Central Bank of Nigeria as required by law,” MTN said.
The group maintains that it obtained central bank approvals in 2016 before any dividends were issued.
Despite MTN Nigeria’s protests, the group’s share price took a massive hit in trade on Thursday morning, tanking 15% to trade at R91.57, down from its Wednesday close of R107.34. The group’s share price is down from R133 at the start of the year, with its current market cap at R202.25 billion.
It comes as the latest blow in a long line of punches MTN has had to endure in Nigeria, culminating in the group having to settle a $1 billion fine related to disconnecting unregistered customers.
Negotiations over that penalty went on for almost a year and weighed heavily on the share price, from which it has not recovered.
As part of the settlement, MTN agreed to list its local unit in Lagos and is planning to do so before the end of the year.