MTN Nigeria has worst day since Lagos listing as probe starts

Lagos — MTN Nigeria Communications had its worst day since the mobile carrier’s May 16 market debut in Lagos after the company said the nation’s antigraft agency is investigating its listing. The stock slumped 7.2% to drop for a second day. 

Nigeria’s Economic and Financial Crimes Commission requested information and documentation on the listing following complaints by brokers that the shares were unavailable for purchase by investors.

The unit of Johannesburg-based MTN Group had surged by the daily limit of 10% for its first five days of trading, owing to huge demand.

“Some investors see it as good time to cash out,’’ Tajudeen Ibrahim, equity analyst at Chapel Hill Denham in Lagos, said.

“The initial rally was largely because of little or no liquidity,’’ he said. An increase in demand from investors “who have been waiting on the sideline” may see the stock rise again, Ibrahim said.

The decision by the Nigerian authorities to investigate MTN’s listing on the Nigerian Stock Exchange has left analysts baffled.

The commission’s probe is not the first time the SA-based telecoms company has found itself in the crosshairs of Nigerian authorities, where it has 60-million of its 237-million subscribers worldwide.

MTN is still dealing with Nigeria’s auditor-general on a claim for back taxes, alleged to be $2bn.

In 2018, MTN settled its $8.1bn repatriation matter with the Nigerian central bank, with a payment of $53m without admitting to guilt.

In 2015 the telecoms giant was slapped with a $5bn fine for failing to disconnect the SIM cards of 5-million unregistered users. The fine was reduced to $1.7bn after negotiations with the authorities. As part of the settlement, MTN decided to list its Nigerian unit. 

MTN Nigeria said it has not been accused of any wrongdoing and will co-operate with the authorities, who are yet to provide details for the investigation.

The commission reportedly raided MTN’s Lagos offices on May 24.

With Penelope Mashego

Bloomberg