with MTN Communications Limited, saying the company will now atone only
for the illegal remittances on preference shares issued in 2008.
Isaac Okorafor, CBN’s spokesman and director of corporate communications,
announced the breakthrough in a statement published on the bank’s website
The MTN also corroborated the truce in a statement simultaneously issued
The CBN explained that having now reviewed the additional documentation
provided by the company MTNN is no longer required to reverse the
historical dividend payments made to MTN Nigeria shareholders.
According to the terms of settlement, the CBN instructed MTN Nigeria to
implement a notional reversal of the 2008 private placement of shares in
MTN Nigeria at a net cost of circa N19.2 billion – equivalent to US$52.6m
(the notional reversal amount).
“This is on the basis that certain certificates of capital importation
(CCIs) utilised in the private placement were not properly issued.
“MTN Nigeria and the CBN have agreed that they will resolve the matter on
the basis that MTN Nigeria will pay the notional reversal amount without
admission of liability”, MTN said.
“In terms of the resolution agreement, the CBN will regularise all the
CCIs issued on the investment by shareholders of MTN Nigeria of circa
$402,625,419 without regard to any historical disputes relating to those
CCIs, thereby bringing to a final resolution all incidental disputes
arising from this matter.
The CBN said four months ago that MTN should return to Nigerian coffers
$8.1 billion repatriated between 2007 and 2015, because of capital
importation certificate irregularities.
Four banks involved in the repatriation, Standard Bank, Stanbic IBTC
Nigeria, Citibank Nigeria and Diamond Bank Plc, were fined by the CBN.
Standard Chartered Bank was fined N2.47 billion, Stanbic IBTC, N1.88
billion, Citibank Nigeria, N1.26 billion and Diamond bank, N250 million.
Here is the statement by CBN:
The Central Bank of Nigeria (CBN) in August 2018 directed MTN
Communications Limited (MTNN) to reverse repatriations valued at $8.1
billion done on its behalf by four commercial banks between 2007 and 2015
on the basis of Certificates of Capital Importation (CCIs) irregularly
issued to MTNN.
Following the keen interest shown by various stakeholders sequel to the
regulatory action, the CBN committed to engage further with MTNN with a
view to achieving an equitable resolution.
Consequent upon the above, MTNN, led by its Nigerian shareholders, held
intensive engagements with the CBN in the course of which it supplied
additional material information, not previously offered to the Bank,
satisfactorily clarifying its remittances. Having now reviewed
the additional documentation provided by the company, the CBN has
concluded that MTNN is no longer required to reverse the historical
dividend payments made to MTN Nigeria shareholders.
However, the CBN identified that the proceeds from the preference shares
in MTNN’s private placement remittances of 2008 were irregular having been
based on CCIs that were issued without the final approval of CBN.
The CBN and MTNN have mutually agreed that the aforementioned transaction
be reversed notionally to bring it into full compliance with foreign
exchange laws and regulations.
The parties have resolved that execution of the terms of the agreement
will lead to amicable disposal of the pending legal suit between the
parties and final resolution of the matter.
The CBN assures foreign investors that the integrity of the CCIs issued by
authorised dealers remain sacrosanct. Potential investors are encouraged
to take advantage of the enormous investment opportunities that abound
However, the telecommunications giant has another issue to resolve: the
court suit over the demand by the attorney general for back taxes.
MTN assured its shareholders that it is also moving towards resolution of
“Shareholders are advised that the legal process initiated by MTN Nigeria
for injunctive relief restraining the AGF from taking further action in
respect of its orders for back taxes is continuing.
“The AGF matter came up for initial mention before the Federal High Court
of Nigeria Lagos Judicial Division on 8 November 2018 and has been
adjourned to 7 February 2019. MTN Nigeria continues to maintain that its
tax matters are up to date and no additional payment, as claimed by the
AGF, is due, and consequently no provisions or contingent liabilities are
being raised in the accounts of MTN Nigeria for the AGF back taxes claim”,
the company said.
The attorney-General of the Federation (AGF) is demanding from the company
the payment of N242 billion and 1.3 billion dollars, for import duties and