South African multinational MTN recently paid NGN80 billion (US$255 million) to Nigerian authorities as part of a fine settlement agreed in June this year, Communications Minister Adebayo Shittu said on 25 December.
- The Nigerian Communications Commission (NCC) fined the telecoms firm NGN1 trillion (then US$5 billion) in 2015 for failing to disconnect unregistered phone lines on its network.
- The firm initially sued the regulator, but it backed down later and reached a deal with the authorities to pay a reduced sum of NGN330 billion (around US$1 billion) and list on the Nigerian Stock Exchange.
- There were allegations of back-channeling leading to the settlement. For instance, President Muhammadu Buhari's Chief of Staff Abba Kyari allegedly received a US$2 million bribe from top MTN figures to influence government decision in favour of the firm1.
- In 2016 MTN paid a third of the reduced fine and will pay up the rest over the next two years based on the agreement.
- A parliamentary committee was probing the fine controversy when the executive intervened in the dispute between the firm and the regulator and brokered the settlement. This drew some criticism in parliament at the time because the committee was still looking into the matter.
- Defending the fine settlement, Shittu said this month, "[We] invited the international community to come and invest, and [so] anything that will be done which will shake the confidence of the international investors in the Nigerian economy, we must avoid it2".
MTN is preparing to list on the country's stock exchange in 2017. The firm met with regulator Security and Exchange Commission (SEC) in November to discuss modalities and the SEC is looking to introduce a new share sale structure in the country where various classes of shares will be issued targeting separate investor groups. Given the attention this fine dispute received, the government and the NCC will be under popular pressure to see that MTN settles all the money that is due as part of the fine. But the allegation of corruption involving MTN executives and Nigerian public officials could be held up to scrutiny if the Economic and Financial Crimes Commission decides to investigate, which could be potentially reputationally damaging for MTN in particular.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.