After months of disagreements, the Central Bank of Nigeria (CBN), on Monday, December 24, 2018, said it has reached an amicable settlement with MTN Communications Limited (MTNN) over its August 2018 directive to reverse repatriations valued at $8.13bn.
Specifically, MTN Nigeria was accused of violating “the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 of the Federal Republic of Nigeria and the Foreign Exchange Manual, 2006.”
The CBN also imposed fines totaling N5.68bn on: Standard Chartered Bank, Stanbic-IBTC, Citibank, and Diamond Bank, whose managements were, along with that of MTN directed “to immediately refund the sum of $8,134,312,397.63, illegally repatriated by the company to the coffers of the (CBN).”
A breakdown of the fines by the CBN showed that while Standard Chartered Bank was ordered to pay N2,470,604,767.13; Stanbic IBTC Nigeria is to pay N1,885,852,847.45. On its part, Citibank Nigeria was fined N1,265,541,562.31; and Diamond Bank, N250m for violating extant rules. Soon after, Diamond Bank informed the Nigerian Stock Exchange (NSE) that its account with the apex bank had been debit to the tune of the entire N250m (READ MORE), while Stanbic IBTC had assured its shareholders that the apex bank will not debit its account for the fine (READ MORE)
Recall that Reuters quoted Rob Shuter, Chief Executive of MTN Group, on Tuesday, September 10, 2018, as telling reporters at the ITU Telecom World conference in Durban that: “Nigeria, it’s our largest market. We’ve been operating there since 2001.
“We do have some challenges these past few weeks, but we believe we will be able to make our case and I’m sure we will move past that as soon as we can,” he assured.
Isaac Okorafor, Director, Corporate Communications at the CBN, in a statement, said both parties “mutually agreed that the aforementioned transaction be reversed notionally to bring it into full compliance with foreign exchange laws and regulations.” (READ MORE)
Following the keen interest shown by various stakeholders sequel to the regulatory action, the CBN said it held intensive engagements with Nigerian shareholders of MTNN, where the company’s officials supplied additional material information not previously offered.
The additional documentation, the statement confirmed, satisfactorily clarified the remittances, a review of which the CBN said it has “concluded that MTNN is no longer required to reverse the historical dividend payments made to MTN Nigeria shareholders.
“…However, the CBN identified that the proceeds from the preference shares in MTNN’s private placement remittances of 2008 were irregular having been based on CCIs that were issued without the final approval of CBN.”
Execution of the terms of the agreement, Okorafor assured, will lead to amicable disposal of the pending legal suit between the parties and final resolution of the matter.
The CBN had in August 2018 directed MTN Nigeria to reverse repatriations valued at $8.1 billion done on its behalf by four commercial banks: Standard Chartered Bank, Citibank, Stanbic IBTC Bank and Diamond Bank between 2007 and 2015 on the basis of Certificates of Capital Importation (CCIs) irregularly issued to MTNN.
Investigations of the illegal repatriations, the CBN had noted at the time, took all of 30 months.
“The CBN assures foreign investors that the integrity of the CCIs issued by authorized dealers remain sacrosanct. Potential investors are encouraged to take advantage of the enormous investment opportunities that abound within Nigeria.”