$8.1bn Repatriation: Controversy trails CBN’s ‘amicable resolution’ with MTN

Central bank of Nigeria (CBN)
Central bank of Nigeria building

The Central Bank of Nigeria (CBN) on Monday announced it has reached an “amicable resolution” with MTN Communications Limited (MTN) over the alleged irregular repatriation of profits from Nigeria, valued at $8.1 billion between 2007 and 2015.

The CBN spokesperson, Isaac Okorafor, in a statement sent to PREMIUM TIMES, said the bank has reversed its earlier decision made in August to demand the reversal of the repatriation of the funds by MTN Nigeria.

Mr Okorafor did not, however, say what the CBN found to warrant the resolution after reviewing the various Certificates of Capital Importation (CCIs) it complained were irregularly issued by four banks based on MTN Nigeria’s request.

In August, four banks – Standard Chartered, Citi, Stanbic-IBTC, and Diamond, were sanctioned by the CBN for allegedly violating the country’s foreign exchange regulations and facilitating the repatriation of the MTN profits.

According to the CBN, its banking supervision department had in March 2018 opened investigations into allegations that the four banks facilitated a string of illicit transfers on behalf of some MTN offshore shareholders between 2007 and 2015.

Standard Chartered was accused of facilitating the repatriation of about $3.45bn; Stanbic-IBTC ($2.63bn); Citibank ($1.77bn) and Diamond ($348.9mn) over the period.

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But, the CBN said there were irregular transactions that involved some MTN shareholders who claimed to have brought into Nigeria about $402.59mn of ‘new investments’

Then CBN said MTN Nigeria violated regulations by refusing to wait for a final approval before ordering the conversion of the shareholders’ loan to preference shares.

After MTN Nigeria failed to respond to several requests for the relevant documents that gave legal backing for the transaction, CBN sought a reversal of the transactions and return of the funds.

In September, MTN filed an application before a Federal High Court in Lagos seeking to restrain the CBN from enforcing its sanctions. Hearing in the case was fixed for December 4, 2018.

However, at the resumed sitting, lawyers for MTN, the CBN and a representative of Nigeria’s Attorney General told the court that all parties were engaging each other in “out-of-court settlement talks.”

Initially, the hearing was adjourned until last Wednesday, December 12, for the presentation of a joint settlement report. But, at the resumed sitting, the case was again adjourned to January 22, 2019.

But, Mr Okorafor said on Monday, following the keen interest shown by various groups interested in the matter after to the regulatory action, the CBN resolved to engage MTN Nigeria with a view to reaching an equitable resolution.

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“Consequent upon the above, MTN, led by its Nigerian shareholders, held intensive engagements with the CBN in the course of which it supplied additional material information, not previously offered to the Bank, satisfactorily clarifying its remittances.

“Having now reviewed the additional documentation provided by the company, the CBN has concluded that MTNN is no longer required to reverse the historical dividend payments made to MTN Nigeria shareholders,” Mr Okorafor said.

However, he said the CBN identified that the proceeds from the preference shares in MTN Nigeria’s private placement remittances of 2008 were irregular, having been based on CCIs that were issued without the final approval of CBN.

“The CBN and MTNN have mutually agreed that the aforementioned transaction be reversed notionally to bring it into full compliance with foreign exchange laws and regulations.

“The parties have resolved that execution of the terms of the agreement will lead to amicable disposal of the pending legal suit between the parties and final resolution of the matter,” he said.

When PREMIUM TIMES called Mr Okorafor to seek further clarification on what he meant by “transaction be reversed notionally”, he did not answer calls to his telephone. He equally did not respond to text messages sent to him on the issue.

It was not clear whether the terms of resolution with MTN Nigeria also covered a reversal of the sanctions imposed on the four banks, which acted on the instructions of MTN Nigeria.

Those familiar with the matter told PREMIUM TIMES the resolution between CBN and MTN Nigeria will raise serious questions if the South African telecoms firm is let go while the sanctions against the banks stay.

However, Mr Okorafor said “the CBN assures foreign investors that the integrity of the CCIs issued by authorised dealers remains sacrosanct. Potential investors are encouraged to take advantage of the enormous investment opportunities that abound within Nigeria.”

MTN Nigeria has a history of violating Nigeria’s laws.

In 2001, MTN refused to carry out regulatory directives from the Nigerian Communications Commission (NCC) to adopt per second billing.

Again, in 2013, MTN Nigeria ignored NCC directives to all telecoms operators to disconnect all unregistered subscriber identity module (SIM) cards from their networks on or before July 1 of that year, or risk N200,000 fine per SIM card.

In October 2015, the NCC imposed N1.04 trillion (about $5.2 billion) fine on MTN Nigeria for refusing to disconnect over 5.1 million unregistered subscribers’ SIM cards from its network.

Following protests, the fine was cut to N780 billion initially, and later by almost 70 per cent to just N330 billion.

Yet, MTN failed to keep its part of the bargain to list its shares on the Nigerian Stock Exchange (NSE) and settle the fine.

The fine is still not paid.

In 2015, a PREMIUM TIMES investigations uncovered how MTN was funnelling abroad, billions of its profits from Nigeria.

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