MTN fights funds seizure

A Cameroon court ordered banks used by MTN to transfer its funds into escrow over a dispute the wire carrier says has nothing to do with it, marking an escalation of a conflict that had already frozen MTN’s access to local accounts. The order, dated 9 June, relates to a dispute between SA lender FNB and Cameroonian businessman Ahmadou Danpullo, MTN said in an emailed response to questions. Fin24 reports that African wireless carriers have been hit with an increasing number of legal, regulatory and tax disputes, curbing investor appetite on the continent at a time when major capital outlays are needed to keep up with growing demand. MTN in January got a $722m tax bill from Ghana that was later scrapped, while the DRC last year seized the passports of executives at carriers including Orange SA and Vodacom Group over a controversial tax law. MTN Cameroon said moving the money to an escrow account is unnecessary as it has already been frozen for 10 months due to the dispute, adding the issue ‘poses a serious risk to the continuation of their business’. Danpullo, a Cameroonian with investments in real estate, telecommunications and other industries, is pursuing a claim of 259bn Cameroon francs (R8bn) related to a dispute with FNB. Last year, he began to target other SA companies operating in Cameroon in an attempt to receive the money, including MTN and a division of food producer Tiger Brands.

Full Fin24 report