Christmas has come early for MTN Group. Four months after it became embroiled in its latest dispute with Nigerian authorities, MTN is in the clear.
Africa’s largest telecoms operator says it has paid $53 million to settle a dispute after Nigeria’s Central Bank accused it of illegally repatriating $8.1 billion in profits.
MTN was also alleged to owe Nigeria up to $2 billion in taxes by the attorney general.
The company was previously ordered to pay $8.1 billion to the CBN for alleged improper repatration of dividends between 2007 and 2015.
It’s the latest hurdle MTN has faced in Nigeria—its largest market and a key revenue driver—after almost two decades of operations. Amid the recent allegations, MTN’s share price slumped sharply and the company appeared to slow down on plans to launch an initial public offering (IPO) in Nigeria.
This year’s illegal profit repatriation claim follows a $1.7 billion settlement—much less than the original $5.2 billion fine originally imposed—only two years ago after a protracted illegal SIM card dispute with Nigeria’s telecoms regulator.
But recent evidence suggests MTN believes the potential for profits in Nigeria is worth the frequent regulatory hassle: the company has announced plans to launch its mobile money service in Nigeria in the second quarter of next year.
The CBN has now concluded that MTN Nigeria is no longer required to reverse historical dividend payments to shareholders.
However, it maintains that the proceeds from preference shares in MTN Nigeria’s private placement remittances of 2008 were irregular.
The CBN subequently instructed MTN Nigeria to pay back $52.6 million as notional reversement amount for these shares, on the basis that certain certificates of capital importation used in the private placement were not properly issued.
MTN Nigeria said it will pay the notional reversal amount without admission of liability.
The company added that its legal process for injunctive relief restraining the AGF from taking further action in respect of its orders for back taxes is continuing.
“MTN Nigeria continues to maintain that its tax matters are up to date and no additional payment, as claimed by the AGF, is due, and consequently no provisions or contingent liabilities are being raised in the accounts of MTN Nigeria for the AGF back taxes claim,” the company stated.
