The Central Bank of Nigeria, has ordered the suspension of dividends to MTN’s shareholders over an alleged illegal repatriation of funds to South Africa.
According to a report by The Guardian, MTN shareholders argued that since the dividends has declared, they must be paid.
MTN, in a quarterly update to its shareholders, recently declared that it was not guilty of the illegal repatriation charges levelled against it by the Nigerian Senate.
According to the President, Renaissance Shareholders Association of Nigeria, Timothy Olufemi, “Well, the accusation may be due to payment of cash dividend to foreign shareholders in dollars without due approvals. But, we do not see any reason for the suspension of cash dividend if not that they have done something wrong. It is uncalled for. Dividend must be paid when declared. It is a debt,” he said.
The Apex bank has instructed four banks, Standard Chartered Bank, Stanbic IBTC, Diamond Bank and Citi Bank, to suspend dividend payout from Nigeria.
The crux of the allegation is that MTN did not obtain certificates declaring it had invested foreign currency in Nigeria within a 24-hour deadline stipulated in a 1995 law and therefore the repatriation of returns on those investments was illegal.
CBN Spokesman, Isaac Okorafor, said that he was not aware of the order.
The South African telecoms firm in the letter to its shareholders, confirmed that “MTN Nigeria, four commercial banks, certain MTN Nigeria directors and shareholders, the Central Bank of Nigeria and others appeared before the Senate on October 20, 2016 at the outset of this investigation.
“The allegations are that $13.97 billion was repatriated illegally by MTN Nigeria through its bankers. MTN Nigeria and its bankers are cooperating with the investigation with a view to resolving the matter as expeditiously as possible.
“In the interim, the CBN has instructed the banks to suspend any remittance of dividends until further notice. MTN Nigeria continues to refute the allegations that MTN Nigeria had improperly repatriated funds from Nigeria.
“Consequently, MTN Nigeria will strongly defend any action that would be prejudicial to its interest. MTN Nigeria has no intention to make any dividend payments over the next six months.”
Senator Dino Melaye blew the lid that MTN in connivance with the Minister of Trade and Investment, Okechukwu Enelamah, and four commercial banks exploited the Nigerian financial system to illegally move $13.97 billion out of the country without the required authorisation.
