MTN Nigeria Communications Limited, through its lawyer, Chief Wole Olanipekun (SAN) has confirmed an out-of-court settlement of the $8.1 billion repatriation allegation with the Central Bank of Nigeria.
Olanipekun said his client had finally reached an agreement with the CBN. He presented before the court a document containing the terms of the settlement between the parties, which he said, they would love the court to endorse as its judgment on the case.
Harry Ukaejiofor, who stood in for CBN’s lead counsel, Seyi Sowemimo (SAN), also confirmed the position.
Counsel for the AGF, Olanike Idenu, did not oppose the application by MTN and CBN but urged the court to strike out the name of the AGF from the suit.
Prior to this, Nairametrics reported that MTN Nigeria may have reached a settlement with the CBN pertaining to its alleged illegal repatriation of funds.
How the settlement was arrived at
The company disclosed that it provided additional documentation to prove it had satisfactorily clarified its remittances. The CBN upon review of the additional documentation concluded that MTN Nigeria was no longer required to reverse the historical dividend payments made to MTN Nigeria shareholders.
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The apex bank, however, maintained that proceeds from the preference shares in MTN Nigeria’s private placement remittances of 2008 of circa USD$ 1 billion were irregular having been based on CCIs that only had an approval-in-principle, but not final regulatory approval of CBN.
Terms of settlement
- MTN Nigeria is to implement a notional reversal of the 2008 private placement of shares in MTN Nigeria at a net cost of circa ₦19.2 billion – equivalent to US$52.6m (the notional reversal amount).
- This is on the basis that certain certificates of capital importation (CCIs) utilized in the private placement were not properly issued.
- MTN Nigeria will pay the notional reversal amount without admission of liability.
- The CBN will regularise all the CCIs issued on the investment by shareholders of MTN Nigeria of circa $402,625,419 without regard to any historical disputes relating to those CCIs.
- MTN Nigeria will be engaging with the banks it obtained the CCIs from, in relation to the issues dealt with in the resolution agreement
How it all began
The CBN in August fined four banks a total of ₦5.86 billion for breaching Nigeria’s extant laws and forex rules when they facilitated illegal repatriation of funds to South Africa on behalf of MTN.
The CBN sanctioned the bank after evidence emerged about how they used irregular Certificates of Capital Importation (CCIs) to remit funds on behalf of MTN’s offshore investors.
The CBN then asked the banks and MTN Nigeria to immediately repatriate a total of $8.134 billion; being part of funds that were illegally taken out of Nigeria by the telco. MTN and thebanks involved denied any form of wrongdoing.
In September, MTN took the Central Bank of Nigeria (CBN) and the office of the Attorney General of the Federation (AGF) to court.
The move according to the firm was in order to protect MTN Nigeria’s assets and shareholders’ rights within the confines of Nigerian law. The firm will, however, continue to dialogue with the relevant authorities.