Nigeria is seeking to resolve a dispute with MTN Group Ltd over a claim that Africa’s biggest wireless carrier illegally transferred $8.1 billion out of the country, an indication relations between the two parties have started to thaw.
The Central Bank of Nigeria made the accusation late last month, plunging the South African company into a crisis that’s wiped almost a third off its share price. MTN has since provided additional information that may lead to an “equitable resolution,” a spokesman for the authority, Isaac Okorafor, said in an emailed statement late Wednesday.
Four banks – Standard Chartered Plc, Citigroup Inc, Stanbic IBTC Plc and Diamond Bank Plc – have also provided further detail on the transactions that will be reviewed by the central bank, Okorafor said.
The quartet were fined about $16 million between them for enabling the allegedly improper transactions.
The latest development suggests there may be a way for Johannesburg-based MTN to make a deal with Nigeria, just as the company did two years ago when it negotiated a $5.2 billion fine down to closer to $1 billion plus a commitment to list its local business in Lagos. However, that penalty – related to subscribers that weren’t properly registered in the country – also weighed heavily on the share price, which has yet to recover.
Furthermore, the central bank’s statement doesn’t refer to $2 billion of back taxes MTN is also accused of owing – a claim that comes from the attorney general’s office.
“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,” Olusola Teniola, president of the Association of Telecommunications Companies Of Nigeria, said in an emailed response to questions. “We look forward to the central bank disclosing the exact reasons for their actions.”
MTN Nigeria said it couldn’t immediately comment.
MTN shares traded at R73.38 at the close in Johannesburg Wednesday, 32% below the level when the shock $8.1 billion claim was made on Aug. 29.
MTN’s response to the double accusation was to go to court, saying allegations by both the Nigerian central bank and attorney general are unfounded, malicious and illegal. Chief executive officer Rob Shuter flew to the country to reassure employees of the company’s commitment to the market, MTN’s biggest with about 66 million customers.
The impasse comes five months before Nigerian President Muhammadu Buhari seeks re-election for a second four-year term. He’s pledged to crack down on graft in Africa’s most populous country, including that perpetrated by companies.