ADIGUN OLABIYI
The furore generated so far on the $8.1bn and N5.87bn sanction by the Central Bank of Nigeria (CBN) on MTN Nigeria and four banks has been one of mixed grill, laced with sentiments depending on which ever divide one belongs to. Some felt CBN’s action amounted to witch-hunting, forgetting the apolitical stance of the Bank. Some canvassed that CBN should have been circumspect in handling the matter as its decision may send wrong signals to a country in dire need of foreign investments. To some, what the CBN did was an outcome of a thorough investigation to have arrived at the figures irrespective of number of years it took is commendable, while keen observers were not surprised because the South African leading telecom giant was synonymous with controversies in its operations and lacking good corporate governance.
MTN operates in 24 countries in Africa and few Asian countries. Among the countries are: Bostwana, Cameroon, Cote d’Ivore, Liberia, Rwanda, South Africa, Republic of Congo, Zambia, Swaziland, Uganda, Sudan, Guinea Bissau, Benin Republic, Yemen, Syria, Iran and Afghanistan, among others. But what many seem ignorant about MTN is that it has always been controversial wherever it operates. Aside the sanction on the illegal repatriation is the issue of tax default of about $2bn as alleged by the Nigeria Minister of Justice and Attorney General, Abubakar Malami, then comes the sanction of the negotiated N303bn fine by the Nigerian Communications Commission, NCC, of which 50% of the sum has so far been paid.
In Cameroon, the company is involved in a brewing freedom of expression scandal coupled with an investigation by the government into unpaid taxes. In its home, South Africa, there is outcry over the decision by the management of the company to buy a major stake in an Iranian internet service provider. South African black shareholders are angry over delayed payouts and the subscriber base kept falling on a daily basis, not to talk of the criticism trailing the company’s decision to appoint a white CEO. In Nigeria where it has operated for close to two decades, MTN Nigeria has been involved in one controversy or the other.
From the foregoing, it is obvious that MTN has built a reputation for itself in controversies. Though a giant in terms of subscriber-base in Nigeria, it has always been having issues with regulators and the government, the reason one should look at the latest CBN sanction for regulatory infraction as the proverbial saying, that “if a lie travels for several decades, it takes only a day to catch up with it”. The sanction by the NCC and the allegation of tax evasion by the Attorney General, few days after the CBN made public its findings of about 30 months, tells volume about MTN Nigeria and elsewhere. Those who have variously castigated the CBN, even accused its officials of complicity in the alleged infraction should not be hoodwinked by MTN collaborators’ outcry of witch-hunting, or scaring away of investors as a cry of patriots, but that of saboteurs.
That things were done wrongly in the past does not mean it cannot be corrected or that it should continue as “business as usual”. CBN named four banks as collaborators in the illegal repatriation of $8.1bn from Nigeria by issuing irregular capital importation certificate on behalf of the South African company.
The four banks were collectively fined the sum of N5.87bn for ‘flagrant violation of extant laws and regulations of the Federal Republic of Nigeria, including the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act.1995 of the Federal Republic of Nigeria, and the Federal Exchange Manual, 2006’.
Though, the CBN spokesperson, Isaac Okorafor, was quoted to have said that the sanctions followed an “allegation of remittance of foreign exchange with irregular Certificates of Capital Importations (CCIs) issued on behalf of some offshore investors of MTN Nigeria Communications Limited and subsequent investigations carried about by the apex bank in March 2018”. The Bank said the Certificates of Capital Importation issued by Standard Chartered Bank at the time of investment along with other banks in respect of $402.6m showed that $59.4m was recorded or invested as shareholders’ loan and $343.1m as equity. But according to CBN this position contradicted the financial statement of MTN Nig. for the year ended December 31, 2007, which indicated that $399.5m was invested as shareholders’ loan and $2.9m as equity investment in accordance with shareholders agreement but contrary to the CCIs issued by Standard Chartered Bank, Stanbic IBTC, Citibank and Diamond Bank.
Other accusations against the banks include: issuance of three CCIs outside the regulatory 24hrs without the approval of the CBN; providing confirmation to two other banks – Citibank and Diamond Bank, instead of transferring the CCIs to them as required by the Foreign Exchange Manual, thus contravening Memorandum 24 (ii) of Foreign Exchange Manual which requires that CCIs should be transferred based on customer’s instruction to a bank of the customer’s choice along with the transaction history of the CCI. Not to mention their failure to issue letter of indemnity to CBN against double remittance in respect of ten (10) CCIs transferred by Diamond Bank, Citibank to it as required by law under sub–section 5(iii) of Memorandum 24 of the Foreign Exchange Manual.
This article is not to rehash the infractions mentioned by the CBN but to caution the Nigerian elites who have the proclivity for working against what is right and working against their own country. If I may ask, can what MTN did in Nigeria be condoned in South Africa by a foreign company? Would any South Africa based bank work against the statutory laws of the land and not get sanctioned? I remember two Nigerian entrepreneurs, journalists and publishers of note (names withheld) who had investments in South Africa – one hoisted a print media but his failure to pay his staff their salary regularly led to his expulsion and liquidation of his business. The other opened up a hotel and thought he could treat South Africans the way he treats his Nigerian employees back home would be condonedin South Africa, he ran away and the enterprise died.
Some elites and collaborators of MTN even cried to the high heavens claiming that the Nigeria upper legislative body, the Senate, had cleared it (MTN) of any financial breach of illegally repatriating $14bn and tried desperately to blackmail the CBN for “recklessness” which to them may dislocate the fragile economy. But information at the disposal of this writer is that the Senate Committee investigating the alleged financial misdemeanor has withdrawn their earlier report urging further investigation in view of the latest CBN revelation. The earlier report did not recommend any sanction against MTN but urged CBN to firm up its supervisory responsibility on the banks
MTN and its Nigerian collaborators should take a lesson in openness and transparency. Therefore, actions of the CBN should not be seen as punitive but a lesson to be taken in good corporate governance. It is also to urge MTN to learn to stick to regulatory and governance structure of their host countries. Though MTN has gone to court to seek redress, the whole world is waiting with bated breath for the outcome.
However, it is retrospective time for MTN who is currently facing challenges in virtually all the country it operates, both in reputation and corpora
On the part of the banks, the lesson to be learnt is to always abide by the rule, not to sabotage or short-change the system for ‘mesh of porridge’. There is always a reckoning day. And the CBN would not have come out with the allegations and sanction if it was not sure of its facts. But the CBN also is admonished to take its supervision and monitoring of the banks serious if as a nation we should be taken serious in our quest to be Africa’s financial hub.
Adigun Olabiyi, a journalist, wrote in from Keffi, Nassarawa State.
Comments are closed.