Johannesburg - MTN Group said it “strongly refutes” an accusation by Nigerian lawmakers that the wireless carrier illegally moved almost $14 billion out of the country, as the company tries to quell the latest controversy in its largest market.
“The allegations made against MTN are completely unfounded and without any merit,” MTN Nigeria CEO Ferdi Moolman said in a statement on Wednesday.
MTN, Africa’s biggest mobile-phone company by sales, is accused of repatriating the funds over 10 years starting in 2006, according to Dino Melaye, the Nigerian politician who proposed the motion on Tuesday. The country’s Senate will thoroughly investigate the claim, it said on its Twitter account. The four banks involved in the alleged illegal transfers are Citigroup., Standard Chartered, and Nigeria’s Stanbic IBTC Holdings and Diamond Bank.
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The fresh accusations come a little over three months after Johannesburg-based MTN agreed to pay a 330 billion naira ($1 billion) fine in cash to the Nigerian government for missing a deadline to disconnect customers. That settlement also included a pledge to list the Nigerian unit on the local stock exchange. In July, MTN appointed units of Citigroup and Standard Bank as advisers for the listing.
MTN shares fell 0.2 percent to R119.54 by 9:50 a.m. in Johannesburg on Wednesday. They declined 3.4 percent after the fresh allegations were reported on Tuesday. The stock is down 37 percent since the fine was imposed in October.
“We cannot blame the market for reacting to a story like this,” Peter Takaendesa, a money-manager at Mergence Investment Managers in Cape Town, said by phone. “The amounts are quite material and the company needs to give the market more concrete information.”
Nigeria’s telecommunications regulator on Tuesday blocked the carrier’s attempt to take over internet spectrum owned by closely held Visafone, which it had agreed to buy in January.
The impact of the developments on the planned listing are still unclear, Takaendesa said. MTN is targeting a listing of the Nigeria unit in 2017, “subject to suitable market conditions,” the company said in July.
Nigeria’s stocks of foreign exchange have dwindled as the falling price and production of crude oil hurts government revenue from exports. Guinness Nigeria said this month it plans to increase exports of the stout to raise funds denominated in dollars and other currencies, which it needs to pay for imported goods. The Nigerian units of Nestle and Bharti Airtel, one of MTN’s main competitors in the country, have both said shortages of foreign exchange in the West African nation are hindering their operations and ability to import equipment.
MTN is trying to repatriate $1.1 billion in profits from Iran, an issue that has burdened the company for almost four years, in part due to US sanctions. Outgoing CFO Brett Goschen said last month that the process would take “at least five to six months” after the first tranche of funds was taken out.
BLOOMBERG