People stand near an advertising billboard for MTN along a street in Abuja, Nigeria, September 4 2018. Picture: REUTERS/AFOLABI SOTUNDE
People stand near an advertising billboard for MTN along a street in Abuja, Nigeria, September 4 2018. Picture: REUTERS/AFOLABI SOTUNDE

SA telecoms firm MTN Group said on Monday it is confident a multibillion-dollar dispute with the Nigerian government will be resolved even as it applied for a court injunction to protect its Nigerian assets.

Nigeria’s central bank last month ordered MTN’s Lagos-based unit to hand over $8.1bn it said was illegally sent abroad, and the government this month handed MTN a $2bn tax bill.

Some industry analysts see Nigerian politics as a factor in the pressure on MTN. President Muhammadu Buhari, who came to power in 2015 on promises to fight corruption and push through tougher regulation, is seeking re-election in 2019.

“Nigeria is our largest market. We’ve been operating there since 2001,” MTN CEO Rob Shuter told reporters at the ITU Telecom World conference in Durban. “We do have some challenges these past few weeks but we believe we will be able to make our case and I’m sure we will move past that as soon as we can.”

SA’s telecommunications minister, Siyabonga Cwele, said on the sidelines of the conference the government is ready to intervene to help MTN resolve the dispute with Nigeria.

“If they need our assistance we will engage our counterpart in Nigeria, but at this stage they have not asked us to intervene,” Cwele told Reuters.

Nigeria’s main allegation against MTN is that it used improperly issued certificates to convert shareholder loans in its Nigerian unit to preference shares in 2007. As a result, $8.1bn in dividends paid by MTN Nigeria to its parent between 2007 and 2015 should be returned, the central bank said.

Separately, Nigeria’s attorney-general says MTN Nigeria should have paid approximately $2bn in taxes relating to imports of foreign equipment and payments to foreign suppliers. MTN’s latest troubles come two years after it agreed to pay more than $1bn to settle a dispute over SIM cards in Nigeria.

MTN, which has expanded in more than 20 frontier markets including war-ravaged Syria and Afghanistan, denies wrongdoing in Nigeria, which accounts for a third of its core profit.

On Monday it said it had applied in Nigeria’s federal high court for an injunction to restrain the central bank and attorney-general from taking further action while it engages Nigerian authorities.

“We remain resolute that MTN Nigeria has not committed any offences and will continue to vigorously defend its position,” the statement read.

Shuter said that regulatory environments elsewhere in Africa and the Middle East were largely aligned with what MTN wanted to achieve.

Reuters

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