MTN shares rise 8.9 per cent on planned CBN meeting over $8.1b claim
The rise in shares is MTN’s biggest in the last six months, but the stock is still down 28 per cent since the $8.1 billion claim was made on August 29, wiping out almost $5 billion of market value.
The CBN said yesterday that it had agreed to negotiations proposed by MTN Nigeria and the four banks involved in the $8.13 billion transfers, which certificate of capital importations were adjudged fraudulent.
It also said the engagement was sequel to the provision of additional information, which is currently being reviewed with a view to arriving at an equitable resolution.
Director of Corporate Communications Department, CBN, Isaac Okorafor, who disclosed this, said the apex bank acknowledged the public interest over the sanctions recently imposed on four deposit money banks (DMBs), but wished to restate that it would continue to welcome foreign investments and investors.
According to Bloomberg, the announcement suggests there may be a way for Johannesburg-based MTN to reach a deal with Nigeria, just as it did two years ago when it negotiated a $5.2 billion fine to about $1 billion and a commitment to list its local business in Lagos.
That penalty was related to subscribers that were not properly registered in the country.
A London-based analyst at Signal Risk, Ronak Gopaldas, who was quoted by Bloomberg, said: “This is a welcome development and cements our initial view that the sanction was unsustainable.
“Considerable damage has already been done in terms of brand damage to Nigeria Inc. and value erosion for MTN. However, a more conciliatory tone will see some of these losses being reversed. It will help calm investors.”
The Apex bank’s statement did not refer to $2 billion of taxes MTN is also accused of owing, a claim that comes from the Attorney General’s office.
Reacting to the development, President, Association of Telecommunications Companies of Nigeria (ATCON), Olusola Teniola, said: “While this is a step in the right direction, continued dialogue to reach an amicable resolution is a minimum standard expected by the investment community.”
Already, MTN has gone to the Federal High Court to seek redress on the matter.
MTN Group CEO, Rob Shuter, at the just concluded International Telecommunications Union (ITU) Telecoms World in Durban, South Africa, described as a disagreement between the telecommunications firm and the Nigerian authority with a promise to resolve the matter amicably.
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