CAPE TOWN – The MTN share price is facing continued strain after it dropped another 2.9 percent on Wednesday in early trade.
The mobile groups share price traded at R70 in intraday trade. This is the lowest price it has traded at since October 2006, according to media reports.
MTN's troubles started earlier this month after the Nigerian government required the group pay back over $10 billion (R151bn).
Nigeria is asking for $8.1bn in alleged aunathorised dividend expatriation and is imposing a $2bn fine for back-taxes.
Earlier this week, the company moved to protect its assets in Nigeria on behalf of its stakeholders, saying that it had decided to approach the country's courts to restrain authorities from taking further action against it.
MTN said it had applied to the Federal High Court of Nigeria for an injunctive relief against the Central Bank of Nigeria (CBN) and the attorney-general of the Federal Republic of Nigeria (AFG).
The CBN also reportedly fined four of the country's banks for their part in helping illegally send $8.134bn out of the country, in breach of foreign exchange regulations.
To add to MTN’s woes, the AFG last week ordered that it pay $2bn in unpaid taxes for foreign imports.
The company has denied both allegations, saying that it would continue to defend its position.
“We remain resolute that MTN Nigeria has not committed any offenses and will continue to vigorously defend its position,” the company said in a statement yesterday.
In 2015 Nigerian authorities slapped MTN with a $5.2bn fine for missing the deadline to disconnect 5.1 million subscribers with unregistered SIM cards.
The fine led to a massive sell-off in MTN stock.
It also saw the telecommunications firm bleeding cash and recording substantive losses in subsequent reporting periods as uncertainty over the company's viability persisted.
The latest fallout between MTN, AFG and CBN have seen international ratings agency Moody’s placing MTN on review.
Moody's last week said uncertainty around the potential implications of the recent CBN and NAG announcements on MTN’s credit profile could spark a downgrade.
“MTN’s management has indicated that both allegations are without merit and they will be engaging with the relevant authorities,” Moody’s said.
Yesterday, MTN accused Nigeria of overreaching with the back-taxes claim. The company said that the Attorney General should not have conducted an unauthorised process that led to reputational damage.
As a result, MTN wants 2 billion naira (R83 million) for reputational damage and anther 1 billion naira for legal fees.
Earlier today MTN was trading at R69.95 a share, it has since recovered slightly.
– BUSINESS REPORT ONLINE