MTN, Africa’s biggest telecoms company, yesterday moved to protect its assets in Nigeria on behalf of its stakeholders, saying that it had decided to approach the country’s courts to restrain authorities from taking further action against it.
MTN said it had applied to the Federal High Court of Nigeria for an injunctive relief against the Central Bank of Nigeria (CBN) and the attorney-general of the Federal Republic of
Nigeria (AFG). The . came after the company’s stock tanked last month when the CBN demanded that it put an $8.1 billion (R123.29bn) refund for allegedly illegally taking money out of that country.
The CBN also reportedly fined four of the country’s banks for their part in helping illegally send $8.134bn out of the country, in breach of foreign exchange regulations.
To add to MTN’s woes, the AFG last week ordered that it pay $2bn in unpaid taxes for foreign imports.
The company has denied both allegations, saying that it would continue to defend its position.
“We remain resolute that MTN Nigeria has not committed any offences and will continue to vigorously defend its position,” the company said in a statement yesterday.
In 2015 Nigerian authorities slapped MTN with a $5.2bn fine for missing the deadline to disconnect 5.1 million subscribers with unregistered SIM cards.
The fine led to a massive sell-off in MTN stock.
It also saw the telecommunications firm bleeding cash and recording substantive losses in subsequent reporting periods as uncertainty over the company’s viability persisted.
The latest fallout between MTN, AFG and CBN has seen international ratings agency Moody’s placing MTN on review.
Moody’s last week said uncertainty around the potential implications of the recent CBN and NAG announcements on MTN’s credit profile could spark a downgrade.
“MTN’s management has indicated that both allegations are without merit and they will be engaging with the relevant authorities,” Moody’s said.
Peter Takaendesa, a portfolio manager at Mergence Investment Managers, yesterday described MTN’s decision to approach the courts as necessary to protect its interests.
Takaendesa also said that the business needed to continue operating, and this required MTN Nigeria to continue to have full access to its operating assets.
“The unprecedented amounts being demanded by the Nigerian authorities would cripple MTN Nigeria if settled as demanded,” he concluded..