MTN Shares Rise on Move to Reach Amicable Resolution on N1.04tn Fine

Source: THISDAYLIVE

MTN shares erased declines and rose as much as 3.2 per cent on the Johannesburg Stock Exchange (JSE), trading 1.7 per cent higher at 130.09 rand at the close of business following news yesterday that the telecommunications giant had withdrawn its law suit against the Nigerian government challenging the N1.04 trillion imposed on its Nigerian subsidiary.

MTN Communications Nigeria Limited also paid N50 billion to the Nigerian Communications Commission (NCC), the industry regulator that slapped the fine, as a mark of “good faith” towards reaching an amicable settlement with the Nigerian authorities on the fine.

The company’s shares have declined 32 per cent since the fine, originally set at N1.04 trillion, was made public on October 26, reported Bloomberg.

According to MTN, the decision to withdraw the court case followed the renewed steps it is taking towards a negotiated settlement and to create a conducive atmosphere for further negotiations.

NCC had imposed the N1.04 trillion fine on the telecoms company last October for contravening the directive on the deactivation of 5.2 million unregistered subscribers on its network.

Subsequently, the fine was reduced by 25 per cent to N780 billion, an amount MTN considered inimical to the survival of the business.
MTN subsequently sought judicial determination as a means of protecting the local ecosystems valued and supported by MTN’s business.

Although the court advised the parties to the suit to reach an out-of-court settlement, THISDAY gathered that government refused to hold further talks with MTN, asking it to withdraw the case before it could hold further talks on the fine.

MTN Nigeria’s chief executive, Mr. Ferdi Moolman, speaking on the issue said: “This is a most encouraging development. It demonstrates a willingness and sincerity by both parties to work together towards a positive outcome.”

He explained that MTN Nigeria paid N50 billion to the federal government as a gesture of good faith and commitment to continue efforts towards an amicable resolution.

He added: “We are hopeful at this stage. Along with the authorities, it is clear that we are collectively committed to working towards a solution that is of mutual benefit to all parties.

“Our industry in Nigeria is an incredibly important example of the remarkable progress in information and communications technology (ICT), particularly as a much needed catalyst for socio-economic growth and development at this time.”

Commenting on the withdrawal of the suit and N50 billion payment towards the fine, the Minister of Communications Technology, Mr. Adebayo Shittu, yesterday said the federal government was yet to take a decision on the latest move by MTN.

Speaking to THISDAY, the minister’s media aide, Mr. Victor Oluwadare, said the government and ministry would make its position known after acknowledging the payment of the said amount, adding that it had not confirmed whether MTN actually paid the N50 billion or not.

He said: “From the minute MTN was sanctioned and MTN wrote to government that the fine should be reviewed, we did so, but after the reduction they went to court.

“Now they have decided on their own to withdraw the case, claiming to have paid some money which is lower than the actual fine.

“As it stands, the ministry is studying the situation and the N50 billion they said they have paid, and hopefully before the week runs out, the issue would have been made clearer to the ministry.

“We don’t have confirmation yet whether it is N5 billion or N10 billion, so government is studying the situation, and before the end of the week, the ministry will make its position known.”