Following the amicable resolution of issues relating to foreign exchange remittances by MTN Nigeria Communications Limited, the Central Bank of Nigeria (CBN) has reversed the $8.1 billion repatriation order.
The CBN in a release on Monday communicated the resolution of the apex bank bringing to an end, 5 months of uncertainty over the issue.
Daily Trust recalls that in August 2018, the CBN directed MTN Nigeria Communications Limited (MTN Nigeria) to reverse repatriations valued at $8.1 billion done on its behalf by four commercial banks between 2007 and 2015 on the basis of Certificates of Capital Importation (CCIs) irregularly issued to MTN.
The CBN stated that following the keen interest shown by various stakeholders sequel to the regulatory action, the CBN committed to engage further with MTN with a view to achieving an equitable resolution.
The Director of Corporate Communications at the CBN, Isaac Okoroafor said: “MTNN, led by its Nigerian shareholders, held intensive engagements with the CBN in the course of which it supplied additional material information, not previously offered to the Bank, satisfactorily clarifying its remittances.
“Having now reviewed the additional documentation provided by the company, the CBN has concluded that MTNN is no longer required to reverse the historical dividend payments made to MTN Nigeria shareholders. ”
However, the CBN identified that the proceeds from the preference shares in MTNN’s private placement remittances of 2008 were irregular having been based on CCIs that were issued without the final approval of CBN.
“The CBN and MTNN have mutually agreed that the aforementioned transaction be reversed notionally to bring it into full compliance with foreign exchange laws and regulations,” the statement further added.
The parties have resolved that execution of the terms of the agreement will lead to amicable disposal of the pending legal suit between the parties and final resolution of the matter.
The CBN assures foreign investors that the integrity of the CCIs issued by authorized dealers remain sacrosanct. Potential investors are encouraged to take advantage of the enormous investment opportunities that abound within Nigeria.
Meanwhile, a statement on MTN’s website today confirmed the resolution reached with the CBN.
The statement further read: “The CBN instructed MTN Nigeria to implement a notional reversal of the 2008 private placement of shares in MTN Nigeria at a net cost of circa N19.2 billion – equivalent to US$52.6m (the notional reversal amount).
“This is on the basis that certain certificates of capital importation (CCIs) utilised in the private placement were not properly issued.
“MTN Nigeria and the CBN have agreed that they will resolve the matter on the basis that MTN Nigeria will pay the notional reversal amount without admission of liability.
“In terms of the resolution agreement, 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, thereby bringing to a final resolution all incidental disputes arising from this matter.
“MTN Nigeria relied on certain commercial banks to ensure all approvals had been obtained prior to the CCIs being issued and to ensure the CCIs were properly utilised in the private placement.
“MTN Nigeria will be engaging with the banks in relation to the issues dealt with in the resolution agreement.
“Shareholders are advised that the legal process initiated by MTN Nigeria for injunctive relief restraining the AGF from taking further action in respect of its orders for back taxes is continuing.
“The AGF matter came up for initial mention before the Federal High Court of Nigeria Lagos Judicial Division on 8 November 2018 and has been adjourned to 7 February 2019.
“MTN Nigeria continues to maintain that its tax matters are up to date and no additional payment, as claimed by the AGF, is due, and consequently no provisions or contingent liabilities are being raised in the accounts of MTN Nigeria for the AGF back taxes claim.
“As a result of the above, shareholders are no longer required to exercise caution in dealing with the Company securities.”
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