Nigerian court adjourns MTN case until March
MTN is facing a $2bn tax demand in Nigeria
MTN’s court battle against Nigeria’s attorney-general, over a $2bn (R27bn) tax demand, is set to drag on.
On Thursday, a Nigerian court postponed the case again, this time until March 26. The hearing was initially scheduled for November 8.
The mobile operator, whose shares crashed in the second half of 2018 when it was slapped with the tax claim and a separate demand that it return $8.1bn worth of dividends, maintains that its tax affairs are up to date.
While the company reached a settlement with Nigeria’s central bank in late December — the $8.1bn claim was reduced to $53m — the tax case remains an overhang on its share price, which lost 2.6% in Thursday afternoon trading.
“We still remain a bit bewildered that the attorney-general would come in now and basically start trying to re-assess various tax matters that, in our opinion, are not part of his responsibility,” MTN CEO Rob Shuter said in a call with investors in late December.
The company has not made any provision for extra taxes, Shuter said. “We are not going to be putting any contingent liabilities in — we will simply be making our case that our tax affairs are up to date.”
MTN’s CFO Ralph Mupita said on the same call that the company planned to list its Nigerian business by the end of May.
The operator, which owns about 78% of its Nigerian business, agreed to a listing as part of an earlier settlement over its failure to disconnect unregistered SIM cards in the West African country.
Shuter said the listing would be done in two phases, starting with “a listing by introduction” — a process that does not include a public offering or a sell-down of the group’s stake in MTN Nigeria. “And then, subject to market conditions, appetite and demand, we would, in phase two, do the sell-down.”
He added that MTN’s recent woes in Nigeria would not affect its dividend policy. The company aims to pay R5 a share for 2018, and higher amounts in coming years.
Shuter said, “In February, the board will need to make its own assessments of what to do, but we really just wanted to say that the dividend policy is still in place.”