MTN’s share price has dipped to a nine-year low after the Central Bank of Nigeria (CBN) ordered the telco to return Sh8.1 billion it allegedly moved out of the country illegally. This is yet another blow to the telecom company which has already settled a penalty of $1 billion in Nigeria for failing to meet a deadline to disconnect unregistered customers. The share price was also affected during this time and it never recovered.
Interestingly, MTN Johannesburg was accused of repatriating dividends against foreign exchange laws nearly two years although it was cleared after investigations last year.
“The re-emergence of these issues is regrettable as it damages investor confidence and, by extension, inhibits the growth and development of the Nigerian economy. “We will engage with the relevant authorities and vigorously defend our position on this matter and provide further information when available,” MTN said in a statement.
Bloomberg reported yesterday that the MTN’s shares dropped 19 per cent in Johannesburg’s early trade to 86.99 Rand, the lowest since March 2009, .
Regulator Fines Several Banks
The Central Bank of Nigeria has also fined the Standard Bank Group, Diamond Bank, Citigroup, and Standard Chartered Plc approximately $16 million for playing a role in moving the money. The regulator has ordered the banks and the telco to refund the money. Standard Chartered will pay the highest fine for transferring the largest amount of $3.4 billion.
CBN described the violation by the banks as: “Flagrant violation of extant laws and regulations of the Federal Republic of Nigeria, including the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 of the Federal Republic of Nigeria and the Foreign Exchange Manual, 2006.”
CBN fined the banks following allegations that they were involved in the remittance of “foreign exchange with irregular Certificates of Capital Importation (CCIs) issued on behalf of some offshore investors of MTN Nigeria Communications Limited and subsequent investigations carried out by the apex bank in March 2018.”
MTN has since refuted the central bank’s claims but its share price has suffered nonetheless. The MTN share price has dropped 21 per cent this year to 107.34 Rand, valuing the company at $14 billion, Bloomberg reported.
MTN’s largest market is Nigeria where it serves over 54 million customers out of the 221 million across the world.
