'Nigerian Government fine on MTN' sage getting more interesting

 

South African-based telecommunications giant, MTN, has reportedly set aside about $600 million in a bid to settle the N780 billion fine imposed on the company by the National Communications Commission (NCC), after posting a 51 percent drop in its annual profits.

This comes after the telecoms company made a “good faith payment” of N50 billion last week and subsequently withdrew its court charges as part of a Federal High Court verdict towards a possible settlement before the 18th of March.

Despite posting a revenue increase by 0.1 percent to 146.35 billion Rands, MTN increased its subscriber base by 4.1 percent to 232.5 million. As such, the telecoms company is optimistic about the fine settlement and plans to list its Nigerian unit on the stock exchange in Lagos once it has resolved a disputed $3.9 billion.

 

Following the loss of 1.4 percent in total revenue and a hovering hefty fine, MTN plans to cut the its full-year dividend to a minimum of 7 Rand this year due to uncertainty surrounding the payment of a record $3.9 billion fine in Nigeria and the lack of U.S. dollars in the country.

President Jacob Zuma’s visit to Nigeria, billed for next week, affords the South African company an opportunity to discuss with President Muhammadu Buhari on several matters including the fine.

A person from the MTN Group office in South Africa said, on the condition of anonymity, that the telecoms company could head back to court if the government fails to reduce the N780 billion fine, The Punch reported.

MTN had an early victory in its legal battle with Nigerian authorities in January,after securing the right to transfer money out of Nigeria after the federal government sought to freeze its accounts. Its decision to hire former U.S Attorney General, Eric Holder, in a desperate move to get a reduction in the fine, might see the federal government engaged in legal battle with the company.