Shares in MTN Nigeria dropped on Thursday to their lowest level since the telecom company listed five weeks ago, after a court case about its $2 billion tax dispute with the government was adjourned until October 2019.

Analysts said the court adjournment created uncertainty for investors as the tax dispute would continue to linger.

Shares in MTN, the local unit of South African telecoms group MTN Group, dropped 2.4% to 128.75 naira each, their lowest level since May 21. They were still above their initial public offer price of 99 Naira when the company listed on May 16.

Nigeria’s attorney general hit MTN Nigeria with a $2 billion tax bill last September, the latest skirmish between the MTN group and authorities in Nigeria, the group’s most lucrative market.

MTN has said the tax demand is without merit and that the attorney general exceeded his powers in making the request.

A judge in the Federal High Court in Lagos, on Wednesday, adjourned the case until Oct. 29.

MTN Nigeria listed with a valuation of 2 trillion naira ($6.5 billion), making it the second-biggest company on the Nigerian Stock Exchange. It climbed to as high as 159.30 naira in the days after listing.

The listing came after the South African group resolved another dispute in Nigeria over unregistered SIM cards. In December, it made a $53 million payment to resolve a money transfer allegation out of Nigeria, levelled by the central bank.

Nigeria is MTN’s biggest market, with 58 million users in 2018 and accounting for a third of the group’s core profit. But the Nigerian business has faced several challenges.

MTN has said it would sell more shares to the public and increase local ownership in MTN Nigeria once the tax row was resolved. (Reuters)

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