MTN applies for injunction to protect assets
Publish date: 12 September 2018
Issue Number: 1749
Diary: Legalbrief eLaw
MTN this week said it was confident a multibillion-dollar dispute with the Nigerian Government would be resolved even as it applied for a court injunction to protect its Nigerian assets. As previously reported in Legalbrief Today, Nigeria’s central bank last month ordered the telecom’s Lagos-based unit to hand over $8.1bn it said was illegally sent abroad while the government earlier this month slapped it with a $2bn tax bill. ‘It’s our largest market…we’ve been operating there since 2001,’ company CEO Rob Shuter told reporters at the ITU Telecom World conference in Durban. Moneyweb reports that he acknowledged the ‘challenges’ with the matter ‘but we believe we will be able to make our case and I’m sure we will move past that as soon as we can’. The main allegation against MTN is that it used improperly issued certificates to convert shareholder loans in its Nigerian unit to preference shares in 2007. As a result, $8.1bn in dividends paid by MTN Nigeria to its parent between 2007 and 2015 should be returned, the central bank said. MTN on Monday said it had applied for an injunction in Nigeria’s Federal High Court to restrain the central bank and Attorney-General from taking further action while it engages Nigerian authorities.
The future of the company's proposed listing on the Nigerian Stock Exchange remains uncertain as tension between the company and regulatory authorities continues to escalate. The listing formed part of the settlement of a fine by the Nigerian authorities two years ago that had threatened the future of Africa's biggest mobile operator. A BusinessLIVE report notes that MTN faced one of the world's largest corporate fines after failing to disconnect unregistered subscribers, but managed to reduce it from more than $5bn to $1.7bn, promising to list its Nigerian business on the bourse. However, growing tension between the authorities and the company threatens to derail the listing. Alan Pullinger, Group CEO of FirstRand, said the listing is ‘probably going to be delayed, maybe for a long time’. ‘We were very hopeful that we were going to be listing a great business, but you can see now obviously it's a lot more difficult and complicated, so I'm not sure how it's going to unfold,’ he said.