MTN shares jump as company settles $8.1bn Nigeria case
MTN Group Ltd. shares jumped as much as 8.2 percent after the phone carrier settled allegations it illegally transferred $8.1 billion of funds out of Nigeria, ending a crisis that had t
hreatened its operations in Africa’s most populous country.
hreatened its operations in Africa’s most populous country.Bloomberg reports that the telecommunication company had paid only $53 million being the proceeds of its 2008 private placement which the CBN said was the basis that certain CCIs utilised in the private placement were not properly issued.
MTN Nigeria had on Monday announced the resoloution of tthe rift between it and the Central Bank of Nigeria (CBN) for unlawful repatriation of $8.1 billion.
The statement read: “MTN Nigeria has held various engagements in order to find an equitable resolution to the matter. In particular, a series of meetings were held in Lagos with CBN officials during November 2018.
At these meetings MTN Nigeria provided additional material documentation which satisfactorily clarified its remittances. “The CBN upon review of the additional documentation concluded that MTN Nigeria is no longer required to reverse the historical dividend payments made to MTN Nigeria shareholders.
“However, the CBN maintains that the proceeds from the preference shares in MTN Nigeria’s private placement remittances of 2008 of circa USD$ 1 billion were irregular having been based on CCIs that only had an approval-in-principle, but not final regulatory approval of CBN.
“The CBN instructed MTN Nigeria to implement a notional reversal of the 2008 private placement of shares in MTN Nigeria at a net cost of circa N19.2 billion – equivalent to US$52.6m (the notional reversal amount). “This is on the basis that certain CCIs utilised in the private placement were not properly issued.” In August, the apex bank had fined Citibank, Diamond Bank, Stanbic IBTC Nigeria and Standard Chartered Bank, a total of N5.8 billion for allegedly issuing irregular CCIs to the telco and it ordered the telco to refund the $8.1 billion to its coffers.
This is on the basis that certain CCIs utilised in the private placement were not properly issued.”
In August, the apex bank had fined Citibank, Diamond Bank, Stanbic IBTC Nigeria and Standard Chartered Bank, a total of N5.8 billion for allegedly issuing irregular CCIs to the telco and it ordered the telco to refund the $8.1 billion to its coffers.