MTN [JSE:MTN] shares fell almost 7%, before recovering, after Nigeria’s government said Africa’s biggest mobile operator evaded taxes and urged a Lagos court not to block a $2bn (R28.7bn at current exchange rates) penalty.
The High Court of Lagos should throw out the company’s attempt to stop it from paying backdated taxes, T. A. Gazali, a government lawyer, said in court Tuesday.
Wole Olanipekun, a lawyer for MTN, said Nigeria’s attorney-general, who imposed the penalty on the mobile carrier, had no right to do so. MTN has previously denied it didn’t pay taxes properly in the West African nation. The case was adjourned until May 7.
MTN fell as much a 6.8%, the most in more than five months, before paring losses to 2.1% by noon in Johannesburg.
MTN’s share price has fallen 17% since it was hit by a double Nigerian penalty in mid-2018. The Central Bank of Nigeria first ordered it to transfer $8.1bn of repatriated dividends back to the country, before the attorney-general announced the measure on taxes.
The company settled the former dispute in December, agreeing to send back $53m and clearing itself of any wrongdoing.
MTN plans to list its Nigerian unit, which has 58 million mobile-phone subscribers, in Lagos once the tax issue is resolved. It will be the biggest company on the bourse by revenue, having made sales of $3bn last year.