MTN fine due to 28 separate violations

A Nigerian newspaper claims to have documents showing that The Nigeria Communications Commission (NCC) has suspended all regulatory services to MTN Nigeria until its pays its R71 billion fine.

Shares in the South African based mobile operator, MTN, declined as much as 12.49% to R167 after on Monday, after the Nigerian Communications Commission imposed a fine of $5.2 billion  (R71 billion) on its operation in Nigeria.

The fine relates to the timing of the disconnection of 5.1 million MTN Nigeria subscribers who were disconnected in August and September 2015 and is based on a fine of N200,000 for each unregistered subscriber.

In late trade on Tuesday, MTN’s shares declined nearly 4.5% to R159.60, reaching an intraday low of R157.71, and shaving off an additional R16 billion in market cap.

Nigerian based scribe, Leadership said that MTN has accumulated as many as 28 infractions with the Nigerian communications authority.

“In the NCC quarterly compliance enforcement report for Q2 2015, out of the six sanctions imposed on operators for various acts on non-compliance, MTN was involved and sanctioned for four separate infractions,” the NCC document stated.

“As it stands today, MTN’s persistent violations have forced the NCC to impose the unprecedented sanction of suspending all regulatory services to MTN following its accumulation of over 28 separate and proven infractions.”

Worryingly for MTN, its license in Nigeria expires in 2016.

The NCC stated that “MTN’s non-compliance with the deactivation directive is unfortunately not an isolated incident. It needs to be seen in the context of a general pattern of non-compliance, with regulatory directives that actually predates the current SIM registration infractions.”

MTN, which connects approximately 233 million people in 22 countries across Africa and the Middle East, has its biggest market in Nigeria, with a subscriber base of  62.5 million.

Meanwhile back home in South Africa, the operator has sparked talk of insider trading after it’s statement on the fine went out on the Johannesburg Stock Exchange’s newswires hours after the news first broke.

Ashraf Mohamed, an executive director at Sycamore Fund, said MTN’s trading volume at around 11:00 on the day of the fine announcement – shortly before the company’s required SENS announcement – was very high.

“Around an hour later the SENS announcement was made. Somebody certainly went in and sold those shares with insider knowledge,” he said.

Mohamed said he will be surprised if the JSE does not investigate the trades which happened before MTN’s announcement.

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MTN fine due to 28 separate violations