MTN suspends dividend payout on CBN’s order
MTN says it had suspended dividends payouts from Nigeria, where it runs the biggest wireless phone network and which generates a third of its annual sales.
The Central Bank of Nigeria (CBN) had earlier ordered the suspension of MTN Group dividend payment from the Nigerian subsidiary until further notice.
The company reported a slight fall in third-quarter user numbers due to a weaker showing in South Africa, where it vies for market share with Vodacom and Cell Companies.
The telecoms company announced this in Johannesburg yesterday, as the firm faces allegations it illegally moved $14 billion out of Nigeria.
MTN Group’s next chief executive will take over three months ahead of plan.
Rob Shuter, Vodafone European boss, was due to start in July 2017; however, MTN said in a statement that accompanying its quarterly updates that the new officer 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 if it unlawfully repatriated 13.97 billion dollars between 2006 and 2016.
“MTN Nigeria continues to refute the allegations that it had improperly repatriated funds from Nigeria.
“Consequently, MTN Nigeria will strongly defend any action that would be prejudicial to its interest”, the company said in its quarterly update.
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.
It, therefore, said that the repatriation of returns on those investments was illegal.
MTN this year agreed to pay a reduced fine of $1.08 billion (N330 billion) to end a long running dispute over unregistered subscriber identity module (SIM) cards in Nigeria.
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 Sept. 27.
In a quarterly update to shareholders, MTN Group said it was not guilty of the illegal repatriation charges levelled against it by the Nigerian senate, stating that the claims are totally unfounded and without merit.
Addressing the latest developments on the alleged illegal repatriation of $13.97 billion by the Group, MTN said the CBN had ordered the four commercial banks, operated by MTN, to suspend dividend payout from Nigeria.
“MTN Nigeria, four commercial banks, certain MTN Nigeria directors and shareholders, the Central Bank of Nigeria and others appeared before the Senate on 20 October 2016 at the outset of this investigation,” the update read.
“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.”