Nigeria: Nigerian MP Names MTN, Trade Minister And Others In Alleged USD14 Billion Illicit Transfer

Who

MTN Nigeria, Senate President Bukola Saraki; Senator Dino Melaye of the governing All Progressives Congress (APC); Nigeria Communications Commision (NCC); Citibank; Standard Chartered Bank, South Africa; Stanbic IBTC Bank and Diamond Bank, both in Nigeria

What, When & Why

MTN Nigeria is the leading GSM firm in the country – accounting for 39% of market share. Nevertheless, this South African firm, and to a lesser extent Stanbic IBTC, has found itself again at the centre of significant political and legal & regulatory risk events in Nigeria.

  • The Fine: In October 2015, the NCC fined MTN NGN1 trillion for refusing to disconnect unregistered lines according to regulations. Although initially, MTN challenged the decision in court, it later backed down later and went in for a settlement with the government—a move that resulted in a 70% reduction of the fine (see here1). However, recently local media have carried rumours that MTN had bribed a top presidency official to influence the government's decision concerning a fine the firm received from the Nigerian Communications Commission in October 2015.2
  • Illegal transfers: Senator Dino Melaye, speaking during a September 27 parliamentary session, claimed that Trade Minister Okechukwu Elenemah and others3 (a) have helped MTN transfer about USD14 billion out of Nigeria illegally since 2006, and (b) set up Special Purpose Vehicles in the Caribbean as channels for those funds. According to him, Stanbic IBTC Bank, Standard Chartered Bank, Citibank and Diamond Bank facilitated the alleged transfers. Senate President Bukola Saraki acknowledged Melaye's claims and directed a Senate committee to investigate the claims within two weeks. Meantime MTN has said the allegations are unfounded and without merit.
  • Senator Melaye: The Kogi West legislator, Senator Melaye, has been involved in a number of disputes within his APC party in the past year. Last year he backed Saraki to be Senate president against the official wishes of the party and this year he confronted Remi Tinubu, a fellow APC senator and wife of APC heavyweight Bola Tinubu. In other words. Melaye doesn't seem to be leaning toward the Buhari administration. Pending further information, this will remain a key factor in assessing this development and implications thereof.

That said – the fight against corruption has been front and centre of the Buhari government since it took office in May 2015 e.g. 'zero tolerance' rhetoric from the presidency and investigation of high profile figures associated with 2010-2015 administration of former president Goodluck Jonathan. And while few doubt the sincerity of the president, allegations of abuse now dog the present administration also.

Outlook

There is a strong possibility that in time this Senate probe will be hushed down to forestall an indictment. Diverse parties will want to avoid creating further concern about the stability of the legal and regulatory environment (as was the case after MTN was fined). A more remote possibility is that the committee recommend investigation by the Economic and Financial Crimes Commission (EFCC) or one of the other anti-corruption agencies. Or they independently open an investigation of their own.

Footnotes

1 http://www.thisdaylive.com/index.php/2016/06/11/finally-ncc-mtn-reach-truce-as-fine-is-reduced-to-n330bn-2/

2 http://punchng.com/mtn-denies-paying-bribe-ncc-fine-reduction/

3 Namely Pascal Dozie, Ahmed Dasuki, Gbenga Oyebode and Babatunde Folawiyo

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