Forex Repatriation: MTN Drags CBN, AGF to Court
MTN Nigeria is seeking legal intervention in the matter concerning demands from the Central Bank of Nigeria (CBN) and the office of the Attorney General of the Federation on foreign exchange repatriation and taxes.
Following the receipt of the letter from the Central Bank of Nigeria (CBN) on foreign exchange repatriation, requesting that $8.1 billion be returned “to the coffers of the CBN”, the notification of the Attorney General of the Federation (AGF) of the government’s intent to recover $2bn in back taxes, and the accompanying negative publicity that has followed the issues in the last two weeks, MTN Nigeria has today, September 10th 2018, filed for an injunctive relief from the Federal High Court in Lagos, against any further steps by the CBN and the AGF until the matter is resolved.
The CBN alleged improper dividend repatriations by MTN Nigeria and requested that $8.1 billion be returned “to the coffers of the CBN”, and the AGF has alleged there are unpaid taxes on foreign payments and imports and that $2.0 billion in relation to these taxes be paid to his office. Furthermore, four commercial banks were issued fines in respect of the administration of the CCI and irregular dividend repatriation.
Commenting on the development and the company’s decision to seek legal action, Corporate Relations Executive, MTN Nigeria, Tobe Okigbo said,
“With situations like this, it is vital for both the government, regulators and the company to have absolute clarity on the nature of both the allegations being made and the processes that are being followed. In the absence of this clarity, our only option is to seek judicial intervention and to ask the courts to act as adjudicator. This has been done today.”
On Tuesday, 4th September 2018, MTN released an official statement on the issue, denying all allegations levelled against it and restating its commitment to Nigeria.
Since the release of this statement, the following developments have taken place: The CBN has deducted directly from the banks concerned the fines levied against them; and the AGF has written to the banks and instructed them to pay these same fines, which have already been deducted, into an “asset recovery account.”
Also, CBN officials have been quoted as saying that on any repatriation of the $8.1 billion the naira equivalent would be returned to MTN Nigeria. We have not received official confirmation of this; but the AGF has written to MTN Nigeria describing the $8.1 billion as a “penalty” and instructed that it be paid into an offshore “asset recovery USD account.”
MTN Nigeria Communications Limited (MTN Nigeria) continues to categorically and unequivocally deny all charges related to the Central Bank of Nigeria (CBN) and Attorney General of the Federation (AGF) investigations into the company’s CCIs and unpaid taxes respectively.
Considering these steps by the authorities, and the conflicting messages and instructions to MTN Nigeria, the company has filed papers today at the Federal High Court Lagos, to seek declaratory and injunctive relief against any further steps by the CBN and the AGF until the matter is resolved.
Speaking further about the development, Okigbo said “The allegationsbeing made involve issues that appear to be complex and so are easily misunderstood and misinterpreted. They are made even more confusing when the relevant authorities send conflicting messages and instructions and act in a way that appears un-coordinated and at cross purposes.
The simple reality is that MTN Nigeria has never repatriated dividends on the CCIs referenced by the CBN and that MTN is fully compliant with Nigerian tax law.
MTN will continue to engage with the relevant authorities and remains resolute that the company has not committed any offences and will continue to defend its position vigorously while reiterating its commitment to Nigeria and expressing its excitement about the potential that the telecoms industry has to accelerate the next phase of Nigeria’s social and economic development.