MTN Nigerian fine raised back to $5.2bn, court refuses to freeze company bank accounts

By bne IntelliNews January 13, 2016

The record fine, imposed on South Africa-based telecoms group MTN by the Nigerian Communications Commission (NCC) has been raised back to $5.2bn, publications in local media revealed.

The penalty was imposed on October 26 after MTN Nigeria failed to disconnect 5.1mn customers with unregistered SIM cards in time during August and September. Following top-lever bargaining and a 'small' mistake, the fine was reduced to $3.9bn at the start of December. However, MTN’s failure to pay it by the end of 2015, as stipulated by the regulator, resulted in reinstating the fine to its original size, which is equal to 21% of the budgeted government spending for 2015, to 17.3% of the planned 2016 expenditure, and to 1.2% of the country’s 2014 GDP at current prices.

MTN has not paid the fine as it challenged it in court and awaits the Federal High Court in Lagos to decide on the matter.

In another court action, Nigeria’s attorney general and justice minister Abubakar Malami asked the Federal High Court in Lagos to freeze MTN Nigeria’s accounts in 21 banks so as to prevent the company from transferring its money abroad and thus frustrating the enforcement of the fine. The request was based on the fact that MTN moved $7.7bn made in Nigeria to a foreign account during the period from October 2007 to May 2009, with $936mn transferred in a single day.

However, on January 12 judge Idris Mohammed turned down the application, stating that Malami had not shown enough facts to prove that MTN is about to empty its Nigerian bank accounts. Mohammed said he would rather urgently hear the case filed by MTN and give a judgment shortly.

MTN is the largest mobile operator in Nigeria with some 62.5mn subscribers and about 42% market share. At the same time, Nigeria is MTN’s largest single market, accounting for 27% of its total customer number in 22 countries in Africa and the Middle East. Nigeria also accounts for about a third of MTN’s sales and for nearly half of its EBITDA.

Last week, Nigerian media reported that the NCC had given the green light to MTN to buy local CDMA operator Visafone Communications with its valuable 800MHz spectrum that will allow the company to launch high-speed 4G data services.

Related Articles

AB InBev sells 54.5% stake in African Coke bottling business for $3.15bn

Anheuser-Busch InBev will sell a 54.5% stake in Africa's largest Coke bottler to Coca-Cola Company for $3.15bn, the two companies said in a joint statement on December 21. The deal is expected to ... more

IMF slashes South Africa’s 2016 growth outlook to 0.7%

The International Monetary Fund (IMF) has lowered sharply its 2016 GDP growth forecast for South Africa to just 0.7% from 1.3% anticipated in October, its World Economic Outlook (WEO) update released ... more

SA IT services firm EOH enters four new markets

South African IT services company EOH has continued its expansion drive through the acquisition of majority stakes in six ICT companies in four new territories, it said in a bourse filing on January ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss