MTN and Nigeria’s central bank (CBN) have concluded talks and reached a settlement over the $8.1 billion the bank alleged that MTN had unlawfully expatriated.
Following months of deliberations, MTN will now pay only $52.6 million (R770 million) to end the dispute over dividend payments made to shareholders.
At the meetings held throughout November 2018, MTN Nigeria provided additional material documentation which satisfactorily clarified its remittances, the group said.
The CBN upon review of the additional documentation concluded that MTN Nigeria is no longer required to reverse the historical dividend payments made to MTN Nigeria shareholders.
However, the CBN maintains that the proceeds from the preference shares in MTN Nigeria’s private placement remittances of 2008 of circa USD$1 billion were irregular having been based on CCIs that only had an approval-in-principle, but not final regulatory approval of CBN.
MTN Nigeria and the CBN have agreed that they will resolve the matter on the basis that MTN Nigeria will pay the notional reversal amount without admission of liability.
In terms of the resolution agreement, the CBN will regularise all the CCIs issued on the investment by shareholders of MTN Nigeria of circa $402,625,419 without regard to any historical disputes relating to those CCIs, thereby bringing to a final resolution all incidental disputes arising from this matter.
While the $8.1 billion issue has now been resolved, MTN said that its action regarding the $2 billion that Nigerian authorities have claimed in back-taxes is still continuing.
The legal process initiated by MTN Nigeria for injunctive relief restraining the authorities from taking further action in respect of its orders for back taxes is continuing, it said.