MTN rallies after Nigerian A-G drops demand for $2bn payment
THE SHARE of telecommunications giant MTN on Friday jumped 5.31 percent to close at R83.67 on the JSE after the attorney-general of Nigeria (A-G) withdrew his demand for a payment of $2 billion (R28.72bn) for unpaid taxes and duties.
In an about-turn, the A-G said in a letter sent to MTN on Wednesday that it was dropping the claim, following a careful review and due consultation with the relevant statutory agencies.
MTN, which had been resolute that it had not committed an offence, said on Friday that it welcomed the A-G’s decision, as it paved the way to resolve the bitter dispute amicably.
“The A-GF has decided to refer the matter to the relevant authorities, being the Federal Inland Revenue Service (Firs) and Nigeria Customs (NC), with a view to them resolving the issues. Accordingly, the A-G has withdrawn its letter of demand for the aforementioned $2bn that was issued in August 2018,” MTN said in a statement.
In 2018, the A-G and Nigeria’s Minister of Justice demanded that the group pay $2bn in unpaid duties and taxes between 2007 and 2017, a claim which the group has challenged in the Nigerian courts.
MTN said that MTN Nigeria would consequently follow due court process to withdraw its legal action against the A-G and engage with Firs and NC on this issue.
MTN group chief executive Rob Shuter said the company welcomed the decision, which paved the way to an orderly and amicable resolution of this matter. “MTN remains fully committed to meeting our fiscal responsibilities and contributing to the social and economic development of Nigeria and all regions where we operate,” Shuter said.
The group said it remained committed to building and maintaining cordial relationships with all regulatory authorities in Nigeria.
Nigeria is MTN’s biggest market, with a subscriber base of 61.5 million, accounting for a chunk of revenue, but the market has been a challenge.
MTN has had a series of run-ins with the Nigerian authorities and paid a $1bn fine in 2016 related to a failure to disconnect unregistered subscribers. It also agreed to pay just $52.6 million in 2018 to settle the Nigerian central bank’s claim over historic dividend repatriations. This was a fraction of the $8.1bn initial fine for allegedly improperly repatriating monies between 2007 and 2015.
Last year, MTN Nigeria was listed on the Nigerian Stock Exchange (NSE) as part of its deals with the authorities, making it the first mobile network operator to list on the NSE.