Nigeria’s Cenbank Wants MTN To Pay 15 Pct Interest On Fund Illegally Transferred Abroad
By Olumidagreaton October 5, 2018
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The Central Bank of Nigeria (CBN) is seeking a court directive to the local unit of South Africa’s telecoms firm MTN to pay 15 percent interest on the fund illegally repatriated outside the country, court paper showed the regulatory bank counter claim filed against the telecoms giant.
The regulatory bank has fined four banks 5.8 billion naira in July for helping MTN to transfer forex outside the country and directed the telecoms firm to return $8.1 billion so illegally taken out of the country.
MTN in rejecting the CBN directive has filed a court case challenging the regulatory bank decision to force it to return the money back to Nigeria.
The CBN filed a counter claim to a court request by MTN which sought to stop the bank from forcing it to bring back the money, the company’s lawyer said on Friday.
In asking a Lagos Federal High Court to throw out MTN’s case, the central bank also requested the firm pay 15 percent annual interest on the $8.1 billion.
The move escalates a dispute between MTN and the monetary authority in a market which accounts for a third of its annual core profit.
The central bank’s lawyer said in the court documents that the $8.1 billion MTN transferred out of Nigeria was purchased improperly from the bank and that the amount forms a large portion of the country’s total foreign reserves.
“The improper depletion of our foreign reserves is a more serious problem for the entire country far above the claims of the Plaintiff (MTN) in its application,” the central bank’s lawyers argued in the document.
Nigeria has been battling to defend its currency and also shore up its reserves of around $44 billion, hobbled by lower oil prices.
“MTN had gone to court, sued the central bank and the attorney general. The central bank has filed a response and a counter claim, meaning that nobody can resort to self-help in the matter any longer,” MTN’s lawyer, Wole Olanipekun, told Reuters.
“With this development, everybody has now surrendered … the grievances to the court. Everybody has to wait for the decision of the court.”
MTN’s next move will be to file a reply to the bank’s claim, he added.
CBN’s spokesman Isaac Okorafor said the central bank “is aggressively engaging MTN and the banks, but he added “I’m hopeful that an amicable resolution will soon be achieved”.
Shares in MTN were trading 4 percent down by 1250 GMT, having earlier fallen as much as 8.5 percent to 79.85 rand, their lowest level since Sept. 21. They were the worst performer in the Johannesburg stock exchange’s top 40 index.
“The market is seeing that (the central bank’s move) as going back to that aggressive stance they had right at the beginning,” said Greg Davies, equities trader at Cratos Capital.
MTN has lost 35.3 billion rand ($2.40 bln), or 17.4 percent, of its market value since the claim was announced.“SYSTEMICALLY IMPORTANT”
The telecoms firm is also facing a $2 billion tax bill from Nigeria’s attorney general, the demand for which MTN has also asked the court to halt to protect its assets in the country. Olanipekun said MTN has received no response from the attorney general yet.