The SA phone company must bring back the cash after it and three banks “flagrantly violated foreign-exchange violations,” Nigeria Central Bank Deputy Governor Joseph Nnanna said by text message Sunday, reiterating a Wednesday order. The lenders have been hit with a combined $16m fine for their role in the transactions, which happened over eight years through 2015.
News of a potential like-for-like naira refund answers one of the outstanding questions arising from last week’s bombshell, when the reserve bank handed down the order to the country’s biggest mobile-phone company. How and when MTN should pay the money and what happens if the company doesn’t comply remain unanswered. MTN denies all allegations.
MTN’s share price ended the week 17% lower in the wake of the turmoil, leaving the stock close to nine-month lows. The news came almost three years after Nigeria hit the carrier with a $5.2bn fine - later reduced to about $1bn - in an entirely separate dispute over SIM-card registration. That incident also weighed heavily on the share price.
MTN had agreed to sell shares in the Nigeria business in Lagos as part of the 2016 SIM-card settlement, but the latest censure has thrown those plans in jeopardy.
The crackdown on the company comes as Nigeria President Muhammadu Buhari seeks re-election for a new four-year term in a February vote. His administration has gone after companies for irregularities as well as tax-defaulters, part of a wider pledge to fight corruption in Africa’s most populous nation.* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER