- ATCON Faults CBN Over $8.1b Refund Order to MTN
The Association of Telecoms Companies of Nigeria (ATCON) has faulted the order to refund $8.1billion handed to MTN Nigeria by the Central Bank of Nigeria (CBN), saying the apex bank has no power to do so.
Its President, Oulsola Teniola, in an email report, said the cash in question belongs to MTN in the first place, wondering what the CBN wants to achieve by its order.
The CBN has accused MTN of untidy business transactions involving alleged repatriation of $8.1billion which it ordered the carrier to refund, while the Office of the Attorney General of the Federation has also issued demand notice of $2billion unpaid taxes over a 10-year period to the telco.
Four local lenders alleged to have facilitated the repatriation were also sanctioned by the apex bank but MTN has strongly denied both allegations, adding that it had the clearance of the apex bank and a clean bill of record with the tax authorities.
Teniola said the industry does not understand what the CBN intends to achieve by the directive to an operator on which it has no regulatory oversight.
He said: “It is very important to note that the figure referred to has almost been fully paid by MTN and that the $8.1billion doesn’t belong to CBN but belongs to MTN. So, on this basis, it is hard to understand what CBN seeks (to achieve) by its demands on MTN that it doesn’t have regulatory oversight over.”
On how the logjam could be resolved, he said dialogue and transparency would do the magic.
“Clarity, transparency and continued dialogue among CBN, the banks and MTN to amicably resolve this matter in the interest of the wider stakeholder community, especially, potential investors closely watching developments on this issue.
“At the moment, processing of CCIs (Certificate of Capital Importation) is shrouded in confusion in what should be a relatively straight forward process in between the banks and CBN their regulator.
According to him, there is no likelihood that MTN refund such huge cash because of its timing.
He said: “A refund is very unlikely. The size of the demand and timing is unreasonable and not in the interest of the country. After all, the Naira equivalent will have to be returned to MTN Nigeria. It is then an interesting situation that this seeks to redress events that occurred when CBN had full oversight and approved the transactions. How do they intend to do that?”
According to Teniola, the matter should be between the banks and the apex bank and not necessarily the banks’ customers (MTN).
“This I believe is a matter that should be in between the banks and CBN and not the client of the banks. NCC may decide to intervene if events unfold that threaten the survival of MTN and the telecom industry that they regulate. For now, it is too early to see which way this will take,” he said, adding, however, that he is not in an official capacity or position to quantify or qualify the impact of the development to corporate brand of the telco.
“I fully believe MTN will continue to engage with the relevant authorities to resolve this latest setback,” Teniola said.
CBN, had in a letter to MTN, said its investigation revealed that the shareholders of the telco invested $402,590,261.03 in the company from 2001 to 2006, which was carried out through the inflow of foreign currency cash transfers and equipment importation, as evidenced by the CCIs issued by Standard Chartered Bank (SCB), Citi Bank (CB) and Diamond Bank (DB); and the CCIs issued at the time of the investment by the above banks to MTN for $402,590,261.03 showed that $59,436,923.44 was invested as shareholders’ loan and $343,153,339.56 as equity.
“However, a review of your organisation’s financial statements for the year ended December 31, 2007 revealed that $399,594,146.00 was recorded/invested as shareholders’ loan and $2,996,117 as equity investment, in accordance with the shareholder’s agreement but contrary to the CCIs issued by the banks.