MTN: CBN promises ‘equitable resolution’ over sanctions imposed on telecom firm, banks

The Central Bank of Nigeria on Wednesday said it has commenced a review of the information provided by telecoms giant, MTN, and four banks sanctioned recently over alleged illegal repatriation of funds.

The apex bank said the review of details submitted by the four banks, accused of helping the South African telecoms company to illegally repatriate $8.1 billion, is being done with a view to reaching an “equitable resolution.”

The central bank had on August 29 ordered MTN and the four banks to bring $8.1 billion back into Nigeria that it alleged the telecoms firm sent abroad in breach of foreign exchange regulations. The development affected shares in MTN which fell nearly a third in Johannesburg stock market after the announcement.

The apex bank thereafter fined and debited the four banks including Standard Chartered PLC, fined 2.4 billion naira ($7.86 million); Stanbic IBTC Bank PLC, fined 1.8 billion naira; Citibank, fined 1.2 billion naira; and Diamond Bank PLC, fined 250 million naira.

The banks in separate statements denied wrongdoings. MTN also denied any wrongdoing. Shortly after the development, Nigeria’s attorney general, Abubakar Malami, imposed a $2 billion tax bill on the telecoms firm. In response to the tax demand, MTN filed a lawsuit accusing Mr Malami of exceeding his powers. The development has created ripples among experts, with concerns raised around the state of Nigeria’s business environment.

But on Wednesday, the apex bank said it is engaging and reviewing the information provided by the banks due to concerns raised after the sanctions were imposed.

“The Central Bank of Nigeria (CBN) acknowledges the public interest over sanctions recently imposed on four deposit money banks (DMBs),” the statement, signed by Isaac Okorafor, CBN’s Director of Corporate Communications, said.

“We wish to restate that the CBN will continue to welcome foreign investments and investors. Indeed, some of our recent innovations and reforms of the Foreign Exchange regime such as the introduction of the NAFEX window, are designed to simplify foreign exchange regulations.”

The bank noted that the delegation of the issuance of Certificates of Capital Importation (CCIs) to commercial and merchant banks some years ago was done to instill confidence in the investor community and encourage the flow of foreign direct and portfolio investments into the Nigerian economy.

The recent sanctions on the banks arose due to irregularities with respect to repatriations made on behalf of MTN Nigeria Limited and were not in any way designed to restrict access to investor returns, it said.

“In response to the recent regulatory actions, the Banks and MTN are engaging the CBN and have provided additional information which is currently being reviewed with a view to arriving at an equitable resolution,” it added.

MTN’s latest troubles come about two years after it agreed to pay more than $1 billion to settle a dispute over SIM cards in Nigeria, the telecoms giant’s biggest and by far most problematic market.