After coming out all guns blazing, Nigeria’s central bank surrendered more ground in its tussle with MTN [JSE:MTN] by giving a reprieve to one of the banks accused of illegally moving $8.1bn out of the country.
Standard Bank [JSE:SBK] said on Tuesday that the Central Bank of Nigeria won’t take more than $2.63bn from the accounts of its local unit because of its role in repatriating dividends on behalf of the continent’s largest wireless carrier.
The news comes less than a week after the regulator said that MTN and the four lenders named in the dispute provided extra information that may lead to an “equitable resolution.”
Nigerian authorities are softening their tone after coming under criticism from analysts such as Signal Risk’s Ronak Gopaldas that the impasse with MTN and lenders including Citigroup, Standard Chartered and Lagos-based Diamond Bank threatened to spook investors.
The regulator had initially demanded Johannesburg-based MTN and the banks refund the money, causing confusion because the dividends were transferred by the mobile operator’s local unit.
The central bank will examine new submissions and, if justified, review an earlier decision to impose a penalty on Standard Bank, the Johannesburg-based lender said in a statement. Standard Bank’s Stanbic IBTC, Standard Chartered, Citigroup and Diamond Bank were fined about $16m between them for repatriating the dividends.
Standard Bank, which has said it acted properly in its role as transfer agent, will continue to engage with the Nigerian central bank, the continent’s largest lender said.
The central bank had already taken the fines from the accounts of some of the lenders, including Stanbic IBTC and Diamond Bank.
“The Central Bank of Nigeria’s decision to review new submissions is a positive,” said Olamipo Ogunsanya, a banking analyst at Renaissance Capital. “If Stanbic can prove it followed all due procedures, it will no longer be subject to the fine.”
Representatives in Lagos for MTN and Citigroup declined to comment, while a spokesperson for Diamond Bank said she was unable to immediately provide a response. A spokesperson for Standard Chartered didn’t answer a phone call or immediately respond to a text message. Isaac Okorafor, the Central Bank of Nigeria’s spokesperson, wasn’t immediately available.
The accusations against MTN - including allegations by the attorney general’s office that it owes $2bn of back taxes - come as President Muhammadu Buhari’s administration faces intense criticism of its economic management in the run-up to the elections and several ruling-party lawmakers have defected to the opposition.
Nigeria was battered by the 2014 slump in crude prices and its economy is still struggling.
The central bank’s willingness to hear more from Standard Bank and MTN on the dividend repatriations suggests there may be a way for MTN to make a deal with Nigeria, just as the company did two years ago when it negotiated a $5.2bn fine down to about $1bn plus a commitment to list its local business in Lagos.
That penalty was related to subscribers that weren’t properly registered in the country.
MTN’s shares rose 2.9%, gaining for a fifth straight day to pare losses this year to about 40%.* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER