CBN to examine new submissions and documentation over MTN transfer dispute

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Nigeria’s Central Bank Governor Godwin Emefiele said on Tuesday he was optimistic the bank would resolve a dispute linked to allegations that South African telecom firm MTN moved funds out of the country illegally.

The regulator last month ordered MTN and its banks to bring $8.134 billion back into Nigeria which the central bank alleged the company had sent abroad in breach of foreign exchange regulations.

MTN’s latest troubles come about two years after it agreed to pay more than $1 billion to settle a dispute over SIM cards in Nigeria, whose finances have been hit by a weak economy and volatile global oil prices.

Emefiele said the crux of the latest alleged infraction, related to the repatriation of funds, was that MTN did not obtain final approval before moving the naira equivalent of $8.1 billion from its profits out of Nigeria.

MTN and its banks have written to the central bank and provided documents on the matter, Emefiele said.

“I am very optimistic we will resolve the matter and I believe that everybody will be happy. MTN will be happy, the banks will be happy. CBN and government would be happy,” Emefiele told reporters in Abuja.

Nigeria, which accounts for a third of MTN’s annual core profit, is MTN’s biggest market and Emefiele said MTN was “systemically important” to his country.

Emefiele said an investigation into the matter started two years ago. He said inadequate responses from the telecoms group compelled it to publish its finding.

The central bank announcement on Aug. 29 sent MTN shares in Johannesburg down by nearly a third but they have recovered after the Nigerian regulator softened its stance on the matter. The shares initially fell on Tuesday but rallied from the previous session to gain 3.24 percent by 1445 GMT.

MTN’s lenders; Standard Chartered, Stanbic IBTC Bank, Citibank and Diamond Bank were also fined in connection to the money transfer.

Earlier on Tuesday, Standard Bank, said Nigeria’s central bank would not be debiting its local unit Stanbic for $2.6 billion, which the regulator said was the bank’s portion of the MTN funds which had been sent abroad.

According to a report filed and made available on the website of the Nigerian Stocks Exchange, the bank said: “The CBN has confirmed that our banking subsidiary WILL NOT be debited for USD2.632 billion, being the portion of the remittances the Bank had made on the basis of the Certificates of Capital Importation, which the CBN had previously suggested that the Bank should also be prepared to refund.”

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Emefiele said any liability arising from the funds transfer was that of MTN and not its banks.

 

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