By MKPE ABANG
After months of intense negotiations the MTN Group and the Nigerian Government have reached an amicable resolution thereby settling the N1.4 trillion fine originally imposed on MTN Nigeria as the company has now agreed to pay a total of N330 billion to fully put the matter to rest.
The Nigerian Communications Commission (NCC), the country’s telecom regulator, had imposed the N1.4 trillion (around $5.2 billion) fine on MTN Nigeria for failure to disconnect 5.1 million unregistered subscribers in August and September 2015.
The fine had already taken a heavy toll on the MTN Group’s operations with erstwhile group CEO, Sifiso Dabengwa resigning, and shortly followed by the CEO of MTN Nigeria, Mr. Michael Ikpoki, and another senior official of the Nigerian subsidiary, Mr. Akinwale Goodluck, who was the Corporate Services Executive.
However, events took a more serious dimension with President of South Africa, Mr Jacob Zuma paying a visit to Nigeria otherwise not originally scheduled, this February, to meet with President Muhammadu Buhari, to mediate on the matter. Of course, other matters did come up for discussion as well.
But an obviously cheery MTN issued a statement, June 10, 2016, to its shareholders informing them of the latest development. The statement titled “Update to shareholders on Nigerian fine and withdrawal of cautionary announcement,” reads:
“Further to the various announcements to shareholders regarding this matter, MTN is pleased to inform shareholders that the matter has been resolved with the Federal Government of Nigeria (FGN) on the following terms:
“MTN Nigeria has agreed to pay a total cash amount of Naira 330 billion over three years (the equivalent of US$ 1.671 billion at the official exchange rate and US$902 million at the Lagos Parallel Market Rate) to the FGN in full and final settlement of the matter payable as set out hereunder.
“The Naira 50 billion paid in good faith and without prejudice by MTN Nigeria on 24 February 2016 forms part of the monetary component of the settlement leaving a balance of Naira 280 billion outstanding which will be discharged as follows:
“Naira 30 billion on 8 July 2016
Naira 30 billion on 31 March 2017
Naira 55 billion on 31 March 2018
Naira 55 billion on 31 December 2018
Naira 55 billion on 31 March 2019
Naira 55 billion on 31 May 2019
“In addition to the monetary settlement set out above:-
“MTN Nigeria subscribes to the voluntary observance of the Code of Corporate Governance for the Telecommunications Industry and will ensure compulsory compliance when the said Code is made mandatory for the Telecommunications Industry.
“MTN Nigeria undertakes to take immediate steps to ensure the listing of its shares on the Nigerian Stock Exchange as soon as commercially and legally possible after the date of execution of the settlement agreement;
“MTN Nigeria shall always ensure full compliance with its license terms and conditions as issued by Nigerian Communication Commission (“NCC”).
MTN Group Executive Chairman Phuthuma Nhleko said “he expresses his thanks and gratitude to the FGN for the spirit in which the matter was resolved and believes this is the best outcome for the Company, its stakeholders, the FGN and the Nigerian people and that the relationship between MTN, the FGN and the NCC has been restored and strengthened”.