September 11, 2018 at 7:30 am #28632
MTN Nigeria has dragged the Attorney General of the Federation (AGF) and the Central Bank of Nigeria (CBN) before the Federal High Court to challenge a directive that the telecoms company should refund $8.134 billion to the bank as well as pay $2 billion to the federal government in tax arrears.
MTN Nigeria prayed the court to restrain the CBN and the AGF from taking further action in respect of their directives.
While the CBN accused MTN Nigeria of illegally repatriating the sum of $8.134 billion out of Nigeria between 2007 and 2015, the AGF also accused the telecoms company of unpaid tax arrears of $2 billion within the same period.
CBN Governor, Mr. Godwin Emefiele, had said the investigation into the activities of MTN Nigeria spanned over a period of 30 months, on several issues and not just on the illegal capital repatriation.
The CBN governor had explained that the hammer on MTN Nigeria was clearly because they took liberty for licence in flouting Nigeria’s foreign exchange laws in the manner of the funding of their equity investment into MTN and subsequent capital repatriation that resulted thereafter.
“They brought in $402 million and said about $350 million of that was equity and the balance was loan, and they were issued Certificates of Capital Importation (CCIs) for the equity. They later reversed that position when they realised that the loans will not attract the kind of taxation equity investment will attract.
“And they altered the structure of their funding in a clear violation of the spirit and intent of Nigeria’s foreign exchange regulations,” he had explained.
Emefiele had insisted that MTN Nigeria manipulated the regulations for maximum profit and tax avoidance, without regards to the laws when they embarked on unauthorised conversion of loans to equity so as to game the system and exploit loopholes.
Although MTN had denied any wrong doing in two different statements it released earlier, the telecoms company, yesterday, went to court to challenge the orders to pay such huge amount, in order to protect its assets in Nigeria and shareholder rights within the confines of the law.
It explained in its latest statement, “In order to protect MTN Nigeria’s assets and shareholder rights within the confines of the law, we have applied in the Federal High Court of Nigeria for injunctive relief restraining the CBN and the AGF from taking further action in respect of their orders, while we continue to engage with the relevant authorities on these matters.”
Commenting on the development, MTN Nigeria Corporate Relations Executive, Mr. Tobe Okigbo, said, “The allegations being made involve issues that appear to be complex and so are easily misunderstood and misinterpreted.
“They are made even more confusing when the relevant authorities send conflicting messages and instructions and act in a way that appears un-coordinated and at cross purposes.
“The simple reality is that MTN Nigeria has never repatriated dividends on the CCIs referenced by the CBN and that MTN is fully compliant with Nigerian tax law.
“With situations like this, it is vital for both the government, regulators and the company to have absolute clarity on the nature of both the allegations being made and the processes that are being followed.
“In the absence of this clarity, our only option is to seek judicial intervention and to ask the courts to act as adjudicator. This has been done yesterday.
“MTN remains fully committed to Nigeria and remains resolute that the company has not committed any offences and will continue to defend its position vigorously. The company will continue engaging with the relevant authorities, and further information will be provided as and when available.”
Meanwhile, the Group Chief Executive Officer of MTN, Mr. Rob Shutter, also said yesterday in South Africa, that the telecoms company would overcome its challenges in Nigeria, and move on with its telecoms business in the country, where it currently has 55 million subscribers out of its 220 million subscribers from 21 countries where it operates.
“In spite of our recent challenges in Nigeria, we will continue to invest in the Nigerian telecoms market and we will definitely find a way to overcome the financial challenges,” Shutter said at the opening ceremony and press conference of this year’s’ International Telecommunication Union (ITU) World conference holding in Durban, South Africa.
According to MTN Nigeria, it would continue to deny all charges related to the CBN and AGF allegations over illegal CCIs and unpaid taxes respectively.
The four banks involved in the alleged violation of the extant laws and regulations of the Federal Republic of Nigeria, including the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995, and the Foreign Exchange Manual, 2006, were last week debited a total of N5.87 billion as fines.
TO ADVERTISE YOUR BUSINESS IN THIS WEBSITE IN-ORDER TO GET MORE BUSINESS CUSTOMERS, CLICK HERE
You must be logged in to reply to this topic.