Further information emerged concerning the amicable settlement between the Central Bank of Nigeria (CBN) and MTN Communications Nigeria over the $8.13bn improperly repatriated by the telecommunications giant between 2007 and 2015.
Under the terms of amicable settlement, according to a statement by South Africa’s MTN Group on Monday, December 24, 2018, MTN Nigeria is “to implement a notional reversal of the 2008 private placement of shares in MTN Nigeria at a net cost of circa N19.2bn – equivalent to US$52.6m (the notional reversal amount).”
“This is on the basis that certain certificates of capital importation (CCIs) utilised in the private placement were not properly issued,” the statement added, noting that both parties “agreed to resolve the matter on the basis that MTN Nigeria will pay the notional reversal amount without admission of liability.”
Still on the resolution agreement, the CBN is to regularise all the CCIs issued on the investment by shareholders of MTN Nigeria of about $402,625,419 without regard to any historical disputes relating to those CCIs, bringing to a final resolution all incidental disputes arising from this matter.
MTN Nigeria said it would engage Standard Chartered Bank, Citibank, Stanbic IBTC Bank and Diamond Bank through which all approvals were obtained prior to the CCIs being issued, in relation to the issues dealt with in the resolution agreement.
The amicable settlement, the statement added, followed various engagements by MTN Nigeria with the CBN officials in Lagos in November 2018, providing additional material documentation which satisfactorily clarified its remittances.
“The CBN upon review of the additional documentation concluded that MTN Nigeria is no longer required to reverse the historical dividend payments made to MTN Nigeria shareholders. However, the CBN maintains that the proceeds from the preference shares in MTN Nigeria’s private placement remittances of 2008 of circa USD$ 1 billion were irregular having been based on CCIs that only had an approval-in-principle, but not final regulatory approval of CBN.
The statement however advised MTN shareholders “that the legal process initiated by MTN Nigeria for injunctive relief restraining the AGF (Attorney General of the Nigeria Federation) from taking further action in respect of its orders for ($2bn) back taxes is continuing.”
MTN Nigeria said it continues to maintain that its tax matters are up to date and no additional payment, as claimed by the AGF, is due, and consequently no provisions or contingent liabilities are being raised in the accounts of MTN Nigeria for the AGF back taxes claim.
The matter came up for initial mention before the Federal High Court of Nigeria Lagos Judicial Division on November 8, 2018 has been adjourned to February 8, 2019.
As a result of the above, the company said shareholders are no longer required to exercise caution in dealing with the MTN securities.