A man passes an MTN board in Lagos, Nigeria. Picture: AFP PHOTO/PIUS UTOMI EKPEI
A man passes an MTN board in Lagos, Nigeria. Picture: AFP PHOTO/PIUS UTOMI EKPEI

A Nigerian judge adjourned on Wednesday a hearing over an $8.1bn dispute between South African telecoms giant MTN and the central bank until January. 22.

The dispute is over the transfer of $8.1bn of funds which Nigeria’s central bank said the company had sent abroad in breach of foreign-exchange regulations. MTN has denied any wrongdoing.

Nigeria is MTN’s biggest market, accounting for a third of the South African company’s annual core profit.

The adjournment came at the request of the central bank and MTN lawyers.

“We are still making moves towards an out of court settlement,” a central bank lawyer told the court.

An MTN lawyer said discussions were ongoing.

JP Morgan said in a research report in November it had an “underweight” recommendation on MTN’s shares.

The US bank said a best-case scenario would be a withdrawal of the $8.1bn with no penalty and no restrictions on future dividend repatriations.

“If the central bank’s claim is withdrawn with no restrictions and no penalties, we see scope for MTN re-rating towards R100 a share in the near term.”

However, JP Morgan said its base-case scenario assumed a $500m settlement, including legal costs, for both the central bank’s $8.2bn claim and attorney general’s $2bn tax claim.

“A downside case would emerge if the central bank settlement was more than $500m.”

The claims rocked MTN’s share price, which fell from R107.34 in late August to below R70 in mid-September. The stock closed at R85.94 on Wednesday, 2.8% up on the day.

MTN has 55-million subscribers in Nigeria where it plans to launch mobile money services as part of its efforts to be the biggest provider of mobile financial services in Africa.

The Nigerian central bank has agreed to allow mobile operators to act as payment-service banks. It issued guidelines for the licensing and regulation of these entities in November. Reuters, with Staff Writer