Associations decry MTN fines, expert says it is “corporate mugging”

The dust has yet to settle over the recent order given to MTN Nigeria by the Central Bank of Nigeria (CBN) to refund $8.134 billion illegally repatriated between 2007 and 2015; and the allegation of $2 billion tax evasion.

Telecom associations, legal experts and some Nigerians with knowledge of the workings of the telecom industry have insisted that the treatment meted out to MTN was too harsh. One said it was a” state sponsored corporate mugging”.May be by its sheer size and control of the Nigerian telecom market, MTN Nigeria has become target of every available fines and harassments.

The most notable was in 2015, when the company was hit with a $5.2 billion fine for failing to disconnect just over five million lines that were not registered.The size of the fine—37% of its revenues and more than double its annual profits—sent shockwaves through the industry. Then in August this year, Nigerian Communications Commission (NCC) said that MTN must list on Nigeria’s stock exchange on or before May 2019 as contained in the agreement over the 2015 fine settlement between the regulator and the telecom company.

By all intent and purposes, going public is usually the decision of the company but Nigeria is forcing the telecom firm to make that decision.The combined weight of the recent demand by CBN and attorney general of the federation amounting to $10. 1billion has also left many wondering the intents and purposes of the legion of fines.

Mr. Gbenga Adebayo, chairman, Association of Licenced Telecoms Operators of Nigeria (ALTON), said that the burden of proof that there was an infraction on the MTN financial transactions with the four banks over funds repatriation, lies on the CBN, based on the earlier report on the investigation of MTN by Senate on the same issue, which freed MTN of any complicity.

MTN has maintained that it got the approval of the CBN for all dividends it had declared in the past, and that the Senate investigation on alleged funds repatriation had since exonerated it from any complicity in illegal funds transfer.

Oulsola Teniola, president, Association of Telecoms Companies of Nigeria (ATCON) also said that the CBN has no powers to order MTN Nigeria to refund the money.ATCON said that the cash in question belongs to MTN in the first place and wondered what the CBN wants to achieve by its order.

He said: “A refund is very unlikely. The size of the demand and timing is unreasonable and not in the interest of the country. After all, the Naira equivalent will have to be returned to MTN Nigeria. It is then an interesting situation that this seeks to redress events that occurred when CBN had full oversight and approved the transactions. How do they intend to do that?”

Elsewhere, Chibuike Okeke, a lawyer and investment analyst, said that “I think regulators are too harsh on companies with the numerous and high amount of fines they impose on MTN, it looks like state sponsored corporate mugging”

“Effective and impartial regulation is good but if this fines continue, it ultimately could end up hurting Nigeria much more in the long term than it does MTN. Foreign investors don’t look favourably on such risk and will think twice about investing in here.” Okeke added.