Unregistered lines: FG writes off $3.5bn for MTN, agrees to accept only $1.6bn instead of the original $5.2bn

Posted by News Express | 10 June 2016 | 3,005 times

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MTN, Africa’s largest cellular operator, has agreed to pay a $1.671 billion fine to Nigeria’s government, a third of the original $5.2 billion imposed on it in October 2015.

The fine will be paid over three years and shares in the Johannesburg-listed mobile operator surged 21% after the settlement was announced on Friday. With 170-million people, Nigeria is Africa’s most populace country and MTN’s largest market.

“MTN is pleased to inform shareholders that the matter has been resolved with the Federal Government of Nigeria,” the company said in a statement. “MTN Nigeria has agreed to pay a total cash amount of Naira 330 billion over three years (the equivalent of $1.671 billion at the official exchange rate and $902-million at the Lagos Parallel Market Rate) to the [government] in full and final settlement of the matter.”

MTN was fined by the Nigerian Communications Commission (NCC) for failing to disconnect 5.2-million subscribers (at $1,000 each) as part of a crackdown last year against unregistered SIM cards, which the Nigerian government said were being used by terrorist organisation Boko Haram.

Nigerian President Muhammadu Buhari reportedly told South African President Jacob Zuma in March that: “You know how the unregistered GSM SIM cards are being used by terrorists and between 2009 and today, at least 10,000 Nigerians were killed by Boko Haram, at least 10,000″.

The fine resulted in MTN CEO Sifiso Dabengwa resigning in November and former CEO and current group executive chairman Phuthuma Nhleko resuming his chief executive role.

Nhleko said he expresses his thanks and gratitude to the Federal Government of Nigeria for the spirit in which the matter was resolved and believes this is “the best outcome for the Company, its stakeholders, the government and the Nigerian people and that the relationship between MTN, the government and the NCC has been restored and strengthened.”

•Text courtesy of Forbes.


Source: News Express

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