- Shareholders Fume as CBN Suspends MTN’s Dividend Payout
Shareholders have reacted sharply to the Central Bank of Nigeria (CBN)’s order on the suspension of MTN Group’s dividend payment from its Nigerian subsidiary, MTN Nigeria, over an alleged illegal repatriation of funds to South Africa.
The shareholders, who spoke to The Guardian, yesterday, faulted the move, insisting that dividend that has been declared must be paid.
The South African telecoms giant in a quarterly update to its shareholders, yesterday, in Johannesburg, South Africa, claimed that it was not guilty of the illegal repatriation charges levelled against it by the Nigerian Senate.
The CBN had ordered the four commercial banks operated by MTN to suspend dividend payout from Nigeria. The banks are Standard Chartered Bank, Stanbic IBTC, Diamond Bank and Citi Bank. But CBN Spokesman, Isaac Okorafor, said yesterday that he was not aware of the order.
The crux of the allegation is that MTN did not obtain certificates declaring it had invested foreign currency in Nigeria within a 24-hour deadline stipulated in a 1995 law and therefore the repatriation of returns on those investments was illegal.
MTN runs the biggest wireless phone network in Nigeria, which generates a third of its annual sales. The telecoms firm had this year, agreed to pay a reduced fine of N330 billion ($1.08 billion) to end a long-running dispute over unregistered SIM cards in Nigeria.
The South African firm has also delayed its long-awaited listing on the Nigerian Stock Exchange (NSE), and no explanations from the firm or the exchange for the delay.
Shares in the company have fallen by more than 14 per cent to their lowest level in more than six years since the latest issue surfaced on September 27.
But shareholders, who spoke to The Guardian on the development, criticised the CBN’s decision as high-handed, considering that the dividend is shareholders’ benefits from their investment.
The President, Renaissance Shareholders Association of Nigeria, Timothy Olufemi, described the suspension of the dividend as ‘uncalled for,’ noting that dividend declared is a debt that must be paid by the firm.
“Well, the accusation may be due to payment of cash dividend to foreign shareholders in dollars without due approvals. But, we do not see any reason for the suspension of cash dividend if not that they have done something wrong. It is uncalled for. Dividend must be paid when declared. It is a debt,” he said.
The President, Ibadan Zone, Shareholders Association of Nigeria, Sola Abodunrin, said: “If the dividend has been declared in an annual general meeting, MTN has no right to suspend it. The investigation that is going on is a different thing entirely. A dividend that has been declared must be paid.”
Similarly, the President, Constance Shareholders Association, Shehu Mallam Mikail, who explained that MTN has no right to suspend shareholders’ dividend, noted that the telecoms giant is making profit and getting good returns from Nigeria.
He urged the regulatory authorities to ensure that multinationals operating in Nigeria complied with the rules so as to protect investors’ rights.
Mikail noted that “The illegal transfers do not concern the issue of dividend payout and MTN can only fish out those concerned in the transfer saga and it should not stop the payment of dividend to shareholders because it is an investment.”
According to the President, Association of Telecommunications Companies of Nigeria (ATCON), Olushola Teniola, the CBN cannot stop a legally registered company from declaring dividends or making dividend payments, unless there is evidence of criminal activity or a court order stipulates this in rare cases.
But the President, Ibadan Zone Shareholders Association of Nigeria, Sola Abodunrin, believed the suspension should not affect MTN from listing next year as planned.
According to him, the agreement to list was part of conditions given when they were negotiating a reduction in their fine, “so as a responsible company, I do not think they will renege. Many Nigerians are looking forward to their listing.”
Timothy Olufemi, however, believed strongly that the suspension would affect MTN’s listing next year.
The South African telecoms firm in the letter to its shareholders, confirmed that “MTN Nigeria, four commercial banks, certain MTN Nigeria directors and shareholders, the Central Bank of Nigeria and others appeared before the Senate on October 20, 2016 at the outset of this investigation.
“The allegations are that $13.97 billion was repatriated illegally by MTN Nigeria through its bankers. MTN Nigeria and its bankers are cooperating with the investigation with a view to resolving the matter as expeditiously as possible.
“In the interim, the CBN has instructed the banks to suspend any remittance of dividends until further notice. MTN Nigeria continues to refute the allegations that MTN Nigeria had improperly repatriated funds from Nigeria.
“Consequently, MTN Nigeria will strongly defend any action that would be prejudicial to its interest. MTN Nigeria has no intention to make any dividend payments over the next six months.”
Senator Dino Melaye blew the lid that MTN in connivance with the Minister of Trade and Investment, Okechukwu Enelamah, and four commercial banks exploited the Nigerian financial system to illegally move $13.97 billion out of the country without the required authorisation.
Meanwhile, the embattled telecommunications firm has revealed that its new chief executive will take over three months ahead of plan.
Vodafone European boss, Rob Shuter, was due to start in July next year but MTN said in a statement accompanying its quarterly update that he would now start on March 13, 2017.
South Africa-born Shuter, a banker with risk management background, will inherit a company that is the subject of a parliamentary investigation in Nigeria on whether it unlawfully repatriated $13.97 billion between 2006 and 2016.
BUA Cement Announces 24.6 Percent Increase in Profit to N43.4 Billion in H1 2021
BUA Cement Plc, Nigeria’s second-largest cement manufacturing company, on Thursday reported a 22.7 percent increase in revenue in the six months ended June 30, 2021.
Revenue rose from N101.261 billion recorded in the first half (H1) of 2020 to N124.278 billion in the first half of 2021.
The company disclosed in its unaudited financial statements release through the Nigerian Exchange Limited and seen by Investors King.
As expected, the cost of sales inched higher by 19.1 percent from N55.539 billion in H1 2020 to N66.158 billion in H1 2021. While gross profit expanded by 27.1 percent to N58.120 billion in H1, up from N45.723 billion.
The cement manufacturing company grew other income by 52.3 percent from N47.653 billion filed in H1 2020 to N72.6 billion in H1 2021.
Administrative expenses rose to N4.17 billion in the period under review, representing an increase of 57.9 percent when compared to N2.643 billion recorded in H1 2020.
Operating profit increased by 23.8 percent from N40.809 billion in the corresponding period of 2020 to N50.524 billion in the period under review.
Profit before income taxes rose by 26.9 percent to N49.700 billion in H1 2021 from N39.165 billion in H1 2020.
The company paid N6.3 billion in income tax in the first half of 2021.
Therefore, profit after tax stood at N43.396 billion in the first six months of 2021, an increase of 24.6 percent when compared to N34.819 billion achieved in the same period of 2020.
Seplat Energy Appoints Dr. Emma FitzGerald as an Independent Non-Executive Director
Seplat Energy Plc has appointed Dr. Emma FitzGerald as an Independent Non-Executive Director of the Company, the company disclosed on Thursday.
Dr. FitzGerald will replace Lord Mark Malloch-Brown who retired from the Board of the Company on 1st August 2021.
Dr. Emma FitzGerald Profile
Dr. FitzGerald is a seasoned executive in Energy & Water, with hands-on experience in transformation through her many years of working at Shell, ranging from building its lubricants business in China to running its Global Retail network.
From 2007-2010, she was accountable for Shell’s Downstream strategy and played a key role in reshaping Shell’s renewables strategy including the creation of Raizen, a game changing biofuels JV with Cosan. From 2013 to 2018 she ran gas distribution and water & waste networks for National Grid and Severn Trent where she successfully
positioned them as sustainability thought leaders in their Industries.
Most recently Dr. FitzGerald served as CEO of Puma Energy International, a global energy company owned by Trafigura and Sonangol, which is focused on high potential developing markets in Africa, Asia and Central America. In 2020 she set up Puma’s Future Energies division to play a critical role in helping customers and communities find the right energy solutions to support the energy transition. Over the last 10 years she has served on various Boards in executive and non-executive capacities and currently sits on the board of UPM Kymmene, an international paper & biomaterials business focused on innovating for a future beyond fossil fuels.
Commenting on the appointment, Dr. A. B. C. Orjiako, Chairman of SEPLAT Energy said: “The Board of SEPLAT Energy is indeed delighted to have Dr. Emma Fitzgerald on board as she brings vast knowledge in important areas such as the energy sector, renewables and sustainability. SEPLAT Energy has a great future ahead and looks forward to the enormous contribution she will make towards its continuing global success.”
Robinhood IPO Priced at Lower End of Range, Firm Valued at $32B
Stock and crypto-trading app Robinhood has secured a $32 billion valuation via its initial public offering (IPO) and is set to debut on the Nasdaq exchange on Thursday.
According to a press release on Wednesday, Robinhood has priced its offering at $38 per Class A common stock share.
The pricing is at the lower end of the $38-$42 per share price range the company had targeted and had planned on selling 5.5 million shares targeting a $1.89 billion raise.
Net proceeds from the sale will go toward working capital, capital expenditures, funding tax obligations, hiring efforts, customer support services, among others.
Shares will be listed on the Nasdaq Global Select Market on Thursday, according to the release.
Earlier this month, Robinhood began unconventionally offering a portion of its IPO to users via its app — a view some consider to be a risky gamble.
Known for its zero-fee trading structure, the company has continued to endure hits to its image as well as legal and political ramifications stemming from the fallout of the GameStop saga and limitations to users trading crypto.
The company is trying to reshape that image and is reportedly working on a new feature that will help protect users from crypto price volatility while hiring a former Google alumn to improve its overall product design.
“Robinhood intends to use the net proceeds for working capital, capital expenditures, funding its anticipated tax obligations related to the settlement of RSUs, and general corporate purposes including increasing its hiring efforts to expand its employee base, expanding its customer support operations and satisfying its general capital needs,” the firm said in the announcement.
Robinhood filed the public offering prospectus on July 1, noting at the time that 17 percent of its total revenue in Q1 came from crypto trading transaction fees, which represented a big jump from the 4 percent in Q4 2020.
“While we currently support a portfolio of seven cryptocurrencies for trading, for the three months ended March 31, 2021, 34 percent of our cryptocurrency transaction-based revenue was attributable to transactions in Dogecoin, as compared to 4 percent for the three months ended December 31, 2020,” the firm said in the initial filing.
Still, the company’s CEO Vlad Tenev is staring down allegations from the Financial Industry Regulatory Authority over his failure to register Robinhood Financial relating to compliance issues.
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