MTN shares rise by 2.6% on possible resolution of $10b demand

Shares of South Africa’s MTN Group rose by 2.6 per cent Wednesday, on the Johannesburg Stock Exchange, following media report of a possible resolution and reduction of the $10.1 billion claims on it in Nigeria.

Bloomberg, while quoting a source, said the deal hasn’t been signed and could yet fall through.

On Tuesday, the Group Chief Executive Officer, Rob Shuter, had said that the telecommunications firm was doing everything within it means to resolve the issue amicably.

The Nigerian authority had asked MTN to refund $8.1 billion allegedly repatriated out of the country without due process and the Office of the Attorney-General, equally asked the telecommunications firm to pay $2 billion tax arrears.

Media report claimed that MTN may likely get a reduction from the $10 billion to about $800 million. However, a source very close to MTN told The Guardian, Wednesday that if MTN admitted to getting a reduction, “it would amount to the fact that telecommunications firm was culpable. Moreover, the case is in Court already, and they have a good case at hand. I don’t see where the $800 million would come in.”

But the Senate has condemned attempt by the Federal Government to reduce the $10.1 billion fine imposed on the communication giant, MTN, to $800 million.

The upper chamber said the planned reduction of the fine is a matter of interest to it, noting that although it was not particularly against whatever the government would want to do with the MTN fine, it should be intimated on why the reduction became necessary.

The Central Bank of Nigeria had in a recent statement by its Governor, Godwin Emefiele, hinted that it would reduce the amount it ordered MTN Nigeria to repatriate.

But Chairman, Senate Committee on Banking, Insurance and Other Financial Institutions, Rafiu Adebayo Ibrahim, told reporters on Tuesday in Abuja that he was shocked when he was contacted that the CBN failed to implement Senate resolutions before conducting another investigation into the alleged infraction by MTN.

Ibrahim said his committee would immediately ask for CBN’s report on the matter to be better informed, adding that the only way Nigerians would know what transpired between the CBN and MTN on the $10.1 billion fine was through a detailed report.