Nigerian Senate hears how MTN allegedly laundered $12 billion

MTN Nigeria office

The Nigerian Senate has heard how South African telecom giant, MTN, allegedly laundered billions of dollars over a number of years, failing to pay necessary tax in the country.

Dino Melaye, representing Kogi West, raised the matter on Thursday. He accused MTN of removing $12 billion from Nigeria illegally.

Members of the upper chamber were clearly angered  when the revelations were made on the floor that the company connived with four commercial banks and a serving minister to ferret out money from Nigeria.

Mr. Melaye, representing Kogi West, said on Thursday in Abuja at the senate that MTN, has been involved in gross money laundering.

Mr. Melaye said, “Between 2006 and 2016, the MTN, in collaboration with four commercial banks and with the help of a serving Minister, has moved over $12bn out of this country”.

He made the revelation under order 42 of the Senate rule and said it was particularly painful that the company was involved in illegal money movement at a time Nigeria was in economic mess.

“All hands must be on deck to recover every loot in the country. We are in a precarious situation and now is the time to recover every stolen money in the country,” he said.

The Senate president, Bukola Saraki, approved Mr. Melaye’s request that the matter be formally tabled with necessary prayers on Tuesday, an indication the senate is likely to launch full investigation into the scam.

The Senate is hearing the case nearly a year after a PREMIUM TIMES’ investigation exposed how MTN for several years, sidestepped Nigerian laws to ship billions of dollars abroad — in so doing, paid less tax in Nigeria.

The 11-month-long investigation showed that the company had been running circles around Nigerian revenue authorities using a complex but noxious tax avoidance scheme called Transfer Pricing.

MTN Nigeria, PREMIUM TIMES established, had been making payments to two overseas companies – MTN Dubai and MTN International in Mauritius – both located in tax havens.

In 2013 for example, MTN set aside N11.398 Billion from MTN Nigeria to pay to MTN Dubai. A similar transfer of N11.789 Billion was made by MTN Ghana to the same MTN Dubai, making it a total of N23.187 Billion that was shipped to the Dubai offshore account.

In a rare disclosure in 2013, MTN admitted it made unauthorized payments of N37.6 Billion to MTN Dubai between 2010 and 2013. The transfers were then “on-paid” to Mauritius, a shell company with zero number of staff and which physical presence in the capital Port Louis is nothing more than a post office letter box.

The disclosure amounted to a confession, given that MTN made the dodgy transfers without seeking approval from the National Office for Technology Acquisition and Promotion (NOTAP), the body mandated to oversight such transfers.

On the basis of an earlier management fees agreement that was technically quashed by NOTAP and on the basis of MTN’s reported revenues, it is estimated that N90.2 Billion could have been transferred out of Nigeria in management fees alone since the company was founded in 2002.

MTN, which was recently fined by the Nigerian government for failing to disconnect unregistered subscribers, has a substantial network of subsidiaries in offshore tax havens, including the British Virgin Islands, Dubai and Mauritius.

Until 2010, MTN Nigeria had an agreement with MTN Dubai to pay 1.75% of revenues to the company for management, and royalties for the use of the MTN trademark.

Nigeria requires that management fees paid by multinationals are approved by the National Office for Technology Acquisition and Promotion (NOTAP). The fee payments had been reversed following a failure to come to a new agreement on management fees with Nigerian regulators.

MTN’s previous agreement with NOTAP expired in 2010. Notwithstanding, MTN continued to make payments overseas.

At the time, MTN told PREMIUM TIMES that it continued to make payments because it expected NOTAP to approve a new deal and backdate it to the date of the expiry of the previous deal.

PREMIUM TIMES made sustained but unsuccessful efforts to get NOTAP and the Federal Inland Revenue Service (FIRS) to comment on the MTN practices in Nigeria.

Read our previous investigation on MTN here.

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  • Rommel

    Why not name this serving minister

    • Man_Enough

      I wonder! He left that angle open, as a loop hole, in case the said minister will come and bribe them to keep it a secret.

  • serubawon70

    To launder money is to coceal the origin of illegally acquired money. I doubt MTN has done that. What we want to know is the ammount of tax MTN has evaded. I don’t know if the senator is competent to interrogate this matter with the reputation of the national assembly. But notwithstanding, NOTAP and FBIR need to clear the air on this issue.

  • AmenWolf

    Rotimi Amaechi in collabo with Abba Kyari.

    • Haba mallam

      You monkey, a serving minister in the Jonathan administration not Buhari

      • Mike udi

        WhT re u saying? “Serving minister” that is present continuous tense. U go school atall? It means the minister serving in Buhari’s govt not minister that served in Jonathan govts

        • serubawon70

          In 2006?

          • lo

            You don’t understand. Serving minister in Buhari’s government, but he was either a governor, or occupying political office when the crime took place. For example: fashola, Amaechi, fayemi etc could be suspect.

  • Abdullah Musa

    Did we believe they were here for a picnic?
    This is the consequence of lacking indigenous technology.
    Could nitel or mtel ship money outside?
    But we killed them.
    Simply revoke mtn’s license, after all we have go.

  • Simeon Nigel

    It appears that it is only MTN, a foreign firm, that the Nigeria Government is concentrating upon more than others for illegally transfering huge sum of amounts of money outside the shore of Nigeria, whilst avoiding paying the right or correct taxes due and owe to Nigerians. How about other foreign firms such like UAC, Unilever, Texeco (oil), Elf (oil), Gulf + Western (oil), BP Petroleum (oil), Shell Petroleum (oil), First Bank (formerly The Standards Bank), Union Bank (formerly Barclays Bank) and a few host of other foreign firms, whom had been operating in Nigeria since and before Nigeria Independence day in 1960 to date. These mentioned companies had been ‘milking wickedily dried’ with impunity the Nigeria state for many decades, and no one inside Nigeria Government, including the Nigeria President cannot be checkmating these firms’ financial activities up to date in Nigeria. These firms are deeply responsible for the ‘mess’ and the nation economy’s runs down today and the Naira currency in-depth of its less degrading value strengths against the dollars of today, as a result this is now leaving a great sizeable number of Nigeria citizens living under penury and object poverty condition.

    • FEMI A USA

      People are not well with their responsibility and remember that some Nigerians are corrupt. They would sell the country for money if they are allowed to do so. Remember the dirty fuel from New Zealand, they are taking advantages of Nigeria from enforcing the laws and other African States.

  • Omooba Adekunle Orafidiya

    MTN is a rogue company that is always in the news for the wrong reasons.

  • Omotolaaraujo

    Yea, they’re not the only company either.

  • Realitytalk

    Now accountability everywhere, nigeria is great and safer for everyone and if you steal, you will face the law, no bypassing law they did during the last clueless regime