Nigeria’s central bank said MTN Group Ltd should not be given an injunction that would stop the wireless carrier having to transfer $8.1 billion back to the West African country.
The Johannesburg-based mobile-phone company should pay 15% annualized interest on the sum until the courts make a judgment, and 10% from then until the whole amount is paid, the Central Bank of Nigeria argued in documents filed with the Federal High Court in Lagos in the past week and seen by Bloomberg News on Thursday.
The central bank alleged in late August that MTN and four of its banks – Standard Chartered Plc, Citigroup Inc, Stanbic IBTC Plc and Diamond Bank Plc – illegally repatriated the money from Nigeria. MTN sought an injunction in early September to buy itself time and fight the claim in its biggest market, which wiped as much as 36% off its market value.
The transfers “may have been premeditated and contrived as a scam to make and maximize profits, defraud the Federal Republic of Nigeria and to enjoy unlimited foreign-exchange income perpetually from a single investment without complying with the foreign-exchange laws and regulations of Nigeria,” the central bank said in the documents.
A spokesman for the central bank, Isaac Okorafor, didn’t answer calls to his mobile or respond to a text message requesting comment.
The court filings suggest the regulator is not prepared to back down over its allegations, despite central bank Governor Godwin Emefiele saying last week that the dispute would be resolved soon and that “everyone will be happy.” Okorafor said shortly beforehand the two sides were in talks that could lead to an “ equitable resolution.”
MTN’s shares fell for the first time in five days on Thursday, declining 2.5% to R87.30. That extended their fall since the central bank made its accusations to 19 percent. Yields on $750 million of bonds due 2024 climbed 13 basis point on Thursday to 6.85%.
MTN is separately facing a claim from Nigeria’s attorney-general that it needs to pay about $2 billion in back taxes, which the company also disputes.
Chief financial officer Ralph Mupita said in an interview that the issues may cause it to reconsider raising cash through an initial public offering of its Nigerian unit in Lagos and rather listing the business by way of introduction, which places existing securities on the exchange. MTN pledged to list the stock after being fined $1 billion for not disconnecting SIM cards two years ago.
That commitment helped reduce the penalty from more than $5 billion.