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MTN Reacts as NLC Pickets Firm over Anti-Labour Laws

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MTN Nigeria, has berated Nigeria Labour Congress (NLC), for picketing its corporate head office in Lagos and other operational offices across the country over alleged refusal to allow its employees join union freely, among others.

 

NLC had MTN over alleged non-compliance to labour laws.

 

The NLC officials picketed MTN offices in various parts of the country including, Kano, Akwa Ibom, Ilorin and Enugu alleging non-compliance to labour laws and the refusal of MTN to allow unionism.

 

In Kwara State, Comrade Yekini Agunbiade and Issa Aremu led labour officials to picket MTN office in Ilorin, the state capital.

 

The MTN offices were blocked and workers were prevented from gaining entrance to the premises.

 

Aremu claimed that MTN did not just disallow unionism but also pay below national minimum wage and constantly sack their workers without benefit.

 

He noted that the picketing will last for three days pending when the Labour leaders will decide the next line of action if the company did not yield.

 

He urged the Ministry of Labour to ensure that all private establishments especially telecommunication companies adhere to the Labour laws for the benefit of Nigerian workers.

 

The organised labour in Akwa Ibom state also picketed the MTN office in Uyo.

 

Etim Ukpong, chairman of Nigeria Labour Congress (NLC) in the state, who led the protest said the company’s labour policies are against civilised labour practices.

 

Meanwhile, MTN in the reaction described the picketing and destruction of their properties as a sad development noting that the safety of their employees is of utmost priority.

 

In a statement signed on Monday by Tobechukwu Okigbo, Corporate Relations executive MTN, said all workers have rights that should be protected.

 

MTN  added that it will continue to champion the rights of their workers whether they are part of a union or not.

 

“As always our primary concern is the safety and well-being of our employees, some of whom were attacked by supposed NLC operatives and have sustained injuries.

 

“We do not prevent our employees from associating amongst themselves as they deem fit and owe our employees the obligation to ensure they are not compelled to join associations.

 

“MTN supports the freedom of association as enshrined in the Nigerian Constitution,” the statement read in part.

 

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Is MTN Being Shaken Down By Buhari’s Government?

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President Muhammadu Buhari

Nigeria’s costly claims against the South African company raise questions about investment security in Africa’s largest economy, according to Peter Fabricius, a consultant with Institute for Security Studies (ISS)

 

ISS partners to build knowledge and skills that secure Africa’s future.

 

Fabricius said that there’s something suspicious about the two large and unexpected charges Nigerian President Muhammadu Buhari’s government has just imposed on the largest cellphone operator in the country, South Africa’s MTN.

 

“Last month the Nigerian central bank ordered MTN to return US$8.1 billion in dividends it allegedly illegally transferred out the country between 2007 and 2015. The bank also slapped US$16 million in fines on several foreign banks for facilitating these transfers.

 

Then the attorney-general’s office demanded US$2 billion in back taxes from MTN, which vowed it was innocent of all the charges and would vigorously oppose them. The double whammy helped knock MTN’s share price by about a third, boosting shareholders’ losses to well over R100 billion since the start of 2018.

 

Coming on top of the US$5 billion fine – later negotiated down to US$1.7 billion – that Nigeria hit MTN with two years ago for failing to disconnect unregistered subscribers, this has raised questions about the motives of Buhari’s government.

 

He faces a difficult re-election campaign in February. A major part of his mandate from his first election in 2014 was to combat corruption and enforce financial regulations. So is clamping down on MTN a genuine attempt to improve governance? Or is it more about fleecing an easy target – a rich foreign company – when low oil prices and mismanagement of the economy have slashed revenue and badly depleted foreign reserves?

 

There are good reasons to be sceptical about the hit on MTN. For one thing, as Dobek Pater, director of business development at Africa Analysis, told Biznews, how was it that the Central Bank of Nigeria and the tax authority failed to detect both the allegedly illegal transfer of dividends and the failure to pay tax for so many years?

 

He said this suggested either a failure by the Nigerian authorities to do their job of monitoring such large financial movements, or a deliberate laxness. If the latter, why did they suddenly decide to enforce the regulations now? It also seems improbable, merely on face value, that after being hit with that huge fine two years ago, MTN would have flouted the regulations again so soon.

 

Pater noted that other mobile phone operators in Nigeria had not come under the same scrutiny as MTN, which was an ‘easy target’ because it was profitable and because its operations were transparent, unlike some other mobile phone operators in the country. Also, no doubt, because it’s foreign.

 

Vestact CEO Paul Theron told Bloomberg that Nigeria’s move was ‘pathetic, nationalistic and immature’ and could ‘severely weaken Nigeria’s economy in the years to come’. MTN has been among the most committed foreign investors in recent decades, the money manager said.

 

Nigeria’s move has also cast doubt on MTN’s plans to list on the Nigerian stock exchange which it promised to do after the fiasco two years ago. Pater told Biznews he thought it unlikely that MTN would want to list in Nigeria under the cloud of alleged flouting of regulations and with its share price at home so far down.

 

Alastair Jones, an analyst at the London-based New Street Research, told South Africa’s Business Times that if MTN failed to avoid the huge claims, the listing might never occur, as this would raise questions about MTN Nigeria as a going concern.

 

Pater told Biznews that perhaps the Nigerian government was trying to get its house in order, adding that ‘from history, MTN does not have a squeaky clean reputation, and there have been some transgressions in the past’.

 

But if indeed the Nigerian authorities were merely shaking down MTN to replenish the country’s foreign exchange coffers and plug the holes in the budget, as some were alleging, this could harm the country’s investment prospects in the long term.

 

MTN would probably not decide to exit Nigeria this time, as the country remained a big earner for it. It provides the largest number of subscribers – about 27% of the total in the 23 countries where it operates across Africa and the Middle East. Nigeria also earns MTN some 25% of its total revenue, second only to its earnings in South Africa.

And Pater pointed out that while the South African market was mature, Nigeria’s was still growing. Even so, if the company continued to be hit by such large penalties, it might eventually reconsider the viability of its Nigerian investment, he said.

 

It was likely that another large operator would then move in to take MTN’s place. Pater suggested though that Nigeria would be lucky to find another mobile phone operator with the same commitment to the country as MTN. And potential new investors with no existing commitments to Nigeria would be discouraged.

 

Atiku Abubakar, a former vice president who is running against Buhari for the main opposition People’s Democratic Party next year, told Bloomberg the way the central bank had targeted MTN would only serve to discourage foreign investors.

 

‘Even in a worst-case scenario where there were breaches of financial laws and regulations, there are much better ways to deal with it than by the public exposure that MTN has been subjected to,’ Abubakar said. ‘It is bound to send the wrong signal to foreign investors.’

 

The saga is already affecting investment prospects, it seems. Alan Pullinger, CEO of FirstRand, which is managing the Nigerian listing for MTN, told Business Times that MTN’s experience had made his group more cautious about doing an acquisition in Nigeria.

 

For some analysts and investors, MTN’s high-profile experience has only served to advertise the hazards of investment in Africa and reinforce an opinion – some would say a prejudice – that Africa as a whole is not a safe destination for one’s money.

 

David Shapiro, deputy chairman of Sasfin Wealth, told Business Day that the news reinforced his ‘sceptical’ stance towards investments in Africa. Despite the continent’s potential, ‘you have governments, and I must include SA, that are largely unpredictable’.

 

For the short-term gain of re-election next year, it seems, Nigeria is risking ‘killing the geese that lay the golden eggs’, as Pater warned.”

 

Peter Fabricius, ISS Consultant

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NLC Urges NCC, EFCC, Others to Probe MTN’s Operations in Nigeria

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The Nigeria Labour Congress (NLC) on Sunday asked government agencies to closely monitor the operations of MTN Nigeria, in the light of the Thabo Mbeki report on illicit financial flow.

Ayuba Wabba, NLC President, Comrade  said in a statement made available to newsmen in Abuja that the Labour body has been vindicated by recent report by the Central Bank of Nigeria on the alleged illicit activities of the company and the tax invasion report of the office of the Attorney General of the Federation against the company.

Wabba said the congress had earlier highlighted labour laws, local content law and security breaches by MTN which led to fatalities of our security personnel in the North East conflict area.

He said: “We at the Nigeria Labour Congress hereby urge MTN Nigeria to comply without further delay with the directive of the Federal Government to it to pay $2 billion in tax arrears as well as the $8.13 billion it was said to have illegally repatriated to South Africa over which four indigenous banks have been fined.

“We similarly urge the Federal Government to spare no effort in recovering this money as anything to the contrary will send wrong signals to other corporate organisations it had punished for lesser tax infractions.

“The need to enforce this order is all the more compelling when it is realised that workers pay taxes they can ill-afford, but religiously pay all the same. It is also worth noting that government’s tax reforms have been skewed in favour of corporate organisations, there is no reason for a default. After all, every taxable person is expected to pay their tax as when due.

“If companies default, with what is government expected to run the country or conduct its business? In our view, this incident does not just directly testy to the Thabo Mbeki Report on Illicit Financial Flows from Africa, it is a major crime against the government and people of Nigeria.

“On our part, we are not surprised by the unethical conduct of MTN. They are not only engaged in the exploitation of Nigerian workers and turning them into slaves, but have extended their frontiers to unwholesome economic exploitation and sabotage.

“The questions on every ones lips are: How many times has MTN done this? How many other companies are doing this? In our Tax Justice Campaign, we relentlessly and assiduously drew the attention of government and the entire citizenry to this humongous crime against the vulnerable people of Africa, especially  Nigeria, over 70 million of whom are said to be the poorest in the world.

“In our candid view, government should use this opportunity to send an  appropriate message to everyone especially corporate organisations who often pay taxes in the breach. Coupled with this, government’s tax reforms will only make meaning if they are judiciously and judicially executed.

“Finally, we feel vindicated by the latest discovery. While offering an explanation for picketing MTN  offices across the country in July this year, we highlighted labour laws, local content law and security breaches by MTN which led to fatalities of our security personnel in the North Easy conflict area.

“We exposed other acts of impunity by MTN in spite of the fact that 60 % of its global income comes from Nigeria.

“Coupled with demanding MTN obey our national laws by allowing unionisation, we urged critical government agencies such as NCC, EFCC, DSS, Immigration and Central Bank to closely look into the operations of the company, especially in light of the Thabo Mbeki Report. We are vindicated.”

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$10.1Bn Fine: “MTN Targeted in State Sponsored Corporate Mugging”

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The dust has yet to settle over the recent order given to MTN Nigeria by the Central Bank of Nigeria (CBN) to refund $8.134 billion illegally repatriated between 2007 and 2015; and the allegation of $2 billion tax evasion.

 

Telecom associations, legal experts and some Nigerians with knowledge of the workings of the telecom industry have insisted that the treatment meted out to MTN was too harsh.  One said it was a” state sponsored corporate mugging”

 

May be by its sheer size and control of the Nigerian telecom market, MTN Nigeria has become target of every available fines and harassments.

 

The most notable was in 2015, when the company was hit with a $5.2 billion fine for failing to disconnect just over five million lines that were not registered.

 

The size of the fine—37% of its revenues and more than double its annual profits—sent shockwaves through the industry.

 

Then in August this year, Nigerian Communications Commission (NCC) said that MTN must list on Nigeria’s stock exchange on or before May 2019 as contained in the agreement over the 2015 fine settlement between the regulator and the telecom company.

 

By all intent and purposes, going public is usually the decision of the company but Nigeria is forcing the telecom firm to make that decision.

 

The combined weight of the recent demand by CBN and attorney general of the federation amounting to $10. 1billion has also left many wondering the intents and purposes of the legion of fines.

 

Mr. Gbenga Adebayo, chairman, Association of Licenced Telecoms Operators of Nigeria (ALTON), said that the burden of proof that there was an infraction on the MTN financial transactions with the four banks over funds repatriation, lies on the CBN, based on the earlier report on the investigation of MTN by Senate on the same issue, which freed MTN of any complicity.

 

MTN has maintained that it got the approval of the CBN for all dividends it had declared in the past, and that the Senate investigation on alleged funds repatriation had since exonerated it from any complicity in illegal funds transfer.

 

Oulsola Teniola, president, Association of Telecoms Companies of Nigeria (ATCON) also said that the CBN has no powers to order MTN Nigeria to refund the money.

ATCON logo.jpg

ATCON said that the cash in question belongs to MTN in the first place and wondered what the CBN wants to achieve by its order.

 

He said: “A refund is very unlikely. The size of the demand and timing is unreasonable and not in the interest of the country. After all, the Naira equivalent will have to be returned to MTN Nigeria. It is then an interesting situation that this seeks to redress events that occurred when CBN had full oversight and approved the transactions. How do they intend to do that?”

 

Elsewhere, Chibuike Okeke, a lawyer and investment analyst, said that “I think regulators are too harsh on companies with the numerous and high amount of fines they impose on MTN, it looks like state sponsored corporate mugging”

 

“Effective and impartial regulation is good but if this fines continue, it ultimately could end up hurting Nigeria much more in the long term than it does MTN. Foreign investors don’t look favourably on such risk and will think twice about investing in here.” Okeke added.

 

 

 

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