MTN Group will now pay a reduced fine of US $1.671 billion to the Nigerian government over a three-year period instead of the earlier amount of US $ 5.2 billion which had previously been proposed by the Nigerian Communication Commission (NCC).
In a statement issued yesterday titled “Update to shareholders on Nigerian fine and withdrawal of cautionary announcement“, MTN Group Executive Chairman Phuthuma Nhleko stated that the matter, which arose after the Group’s Nigeria subsidiary failed to register details of its 5.2 million subscribers in the country, has been resolved.
“Further to the various announcements to shareholders regarding this matter, MTN is pleased to inform shareholders that the matter has been resolved with the Federal Government of Nigeria (FGN) on the following terms…” Nhleko stated.
As part of the deal, MTN Nigeria will pay a total cash amount of Naira 330 billion over three years (the equivalent of US $ 1.671 billion at the official exchange rate and US $902 million at the Lagos Parallel Market Rate) to the FGN in full and final settlement of the matter payable as set out hereunder.
The statement adds that the Naira 50 billion (US $250 million) paid in “good faith and without prejudice” by MTN Nigeria on 24 February 2016 forms part of the monetary component of the settlement leaving a balance of Naira 280 billion (US $1.4 billion) which will be settled in installments.
According to the agreement, MTN Nigeria will disburse Naira 30 billion (US $150 million) on July 8, 2016; Naira 30 billion (US $150 million) on March 31, 2017; Naira 55 billion (US $275 million) on March 31, 2018; Naira 55 billion (US $275 million) on December 31, 2018; Naira 55 billion (US $275 million) on March 31, 2019 and finally, Naira 55 billion (US $275 million) on May 31, 2019
In addition to the monetary settlement, MTN Nigeria “subscribes to the voluntary observance of the Code of Corporate Governance for the Telecommunications Industry and will ensure compulsory compliance when the said Code is made mandatory for the Telecommunications Industry.”
Furthermore, the statement added that MTN Nigeria has committed to take immediate steps to ensure the listing of its shares on the Nigerian Stock Exchange as soon as “commercially and legally possible” after the date of execution of the settlement agreement and always ensure full compliance with its license terms and conditions as issued by the industry regulator NCC.
MTN Group Executive Chairman Phuthuma Nhleko said he expresses his thanks and gratitude to the FGN for the spirit in which the matter was resolved, adding that he “believes this is the best outcome for the Company, its stakeholders, the FGN and the Nigerian people and that the relationship between MTN, the FGN and the NCC has been restored and strengthened.”
The deal now brings an end to the issue which has been on-going since late last year and led to the departure of former MTN CEO Sifiso Dabengwa.