Telecom
FG Targets MTN for Cash as Buhari Govt. Tightens Rules Ahead 2019 Elections- Expert
The many troubles of MTN group in Nigeria may both economic and political play the federal government of Nigeria, according to Ron Klipin, an analyst at Cratos Wealth in Johannesburg.
Klipin, was reacting as federal government has slammed MTN Nigeria with a $2 billion tax demand.
This is another curve ball directed at Africa’s biggest wireless carrier less than a week after it was ordered to refund $8.1 billion in illegally repatriated funds.
Klipin in a chat with Bloomberg said about the fines that “This could be an economic and political play by Nigeria”.
“The Nigerian economy is looking for additional sources of revenue and at the same time the government wants to be seen as tightening up the regulatory framework in the country.” Klipin added.
The additional scrutiny on MTN comes as President Muhammadu Buhari seeks re-election for a new four-year term in a February vote.
Buhari
His administration has pledged to fight corruption in Africa’s most populous nation, including tax avoiders and companies acting unscrupulously.
MTN continues to strenuously deny the allegations being made by the Central Bank of Nigeria and has provided further clarity on the company’s position.
MTN on its own said it had been in talks with Abubakar Malami, Attorney-General, over concerns around tax compliance; but it was billed all the same.
The company in a statement said it was billed for importation of foreign equipment and payments to foreign suppliers, all spread across a period of about ten years.
MTN outlined the tax dispute and refuted both accusations in a statement on Tuesday, yet faces an uphill battle to convince investors it won’t end up shelling out for either or both offenses in its largest market. The shares extended their slump, falling 17 percent to an almost 12-year low by the close in Johannesburg.
“We remain resolute that MTN Nigeria has not committed any offenses and will vigorously defend its position,” the Johannesburg-based company said.
The office of Nigeria’s attorney general calculated that MTN owes $2 billion related to the import of foreign equipment and payments to suppliers over the past decade.
It asked the South African company to carry out a self-assessment in response, but last week rejected the company’s findings, which concluded that it had owed — and paid — $700 million.
MTN reported the ongoing dispute for the first time Tuesday.
Last week, the Nigerian central bank told MTN to return funds it alleges the company illegally transferred out of the country over eight years through 2015.
That accusation put the carrier’s planned share sale in Lagos in jeopardy, while the sanctions may restrict its ability to pay dividends.
On the CBN allegations, MTN said that it is both regrettable and disconcerting that despite the historic engagements with the Nigerian authorities by MTN Nigeria, the senate investigation into the CCI matter, and the multiple tax assessments done by the Nigerian tax authorities over many years that were satisfactorily concluded, that these matters are being reopened.
Tobe Okigbo MTN Corporate Relations Executive said: “From the CBN’s own letter and subsequent statements, it is clear that there is no dispute that the capital captured in MTN’s books and for which CCIs were issued was imported into Nigeria, and this is acknowledged explicitly by the CBN.
It is equally clear that Nigerian law provides for guaranteed unconditional transferability of funds through an Authorised dealer in freely convertible currency relating to dividends or profits attributable to the investment, payments and in respect of loan servicing where a foreign loan has been obtained.”
He went on to say: “All dividend repatriation done by MTN Nigeria to its shareholders was done on the basis of its equity capital and all the historic dividends were declared against valid equity CCIs and in fact no preference dividends were declared and no interest in respect of these preference shares was paid. This means that it is incorrect to suggest that the conversion of a shareholder loan to preference shares has any relation to the repatriation of dividends. The two are simply not connected and we are trying to understand this position that the Central Bank has taken.”
Speaking on the Attorney General’s ‘demand notice’ for historical tax obligations, Mr Okigbo said: “MTN has conducted a detailed review of these claims, and provided evidence of tax remittance to the Attorney General’s office.
The Attorney General’s notice indicates that he is rejecting this evidence. We believe that all taxes due to the Nigerian government have been paid and these allegations have not been raised by any of the revenue generating agencies that MTN engages with regularly, and from whom MTN has received numerous awards for compliance.”
MTN Nigeria will continue to engage with the relevant authorities on all these matters and we remain resolute that MTN Nigeria has not committed any offences and will vigorously defend its position.
Update on the CBN letter on foreign exchange
MTN Group and the original shareholders injected a total of $402, 625,419 into MTN Nigeria between 2001 and 2006 in the form of loans and equity.
These initial inflows were the basis for the issuance of various legacy CCIs obtained from Authorized Dealers in accordance with regulations. The inflow of capital has been confirmed by the CBN.
The CCI process is essentially in place both for the protection of investors as well as to provide the CBN with documentary evidence for monitoring capital inflows and outflows. Although over time the CCIs have been re-issued, consolidated and re-constituted to reflect the changing MTN capital and shareholding structure, the amount of 402, 625,419, has remained the same.
One aspect of the changing capital structure was the conversion of shareholder loans to preference shares. It is important to note that all the historic dividends were declared against valid equity CCIs and in fact no preference dividends were declared and no interest in respect of these preference shares was paid.
The Attorney General’s notice of intention to recover tax
The Attorney General notified MTN that his office made a high-level calculation that MTN Nigeria should have paid approximately $2,0 billion in taxes relating to the importation of foreign equipment and payments to foreign suppliers over the last 10 years and he requested MTN Nigeria to do a self-assessment of the taxes in this regard that have been actually paid.
In August 2018 MTN submitted comprehensive documentation to the office of the AG. MTN Nigeria has also completed an initial assessment of the full period which indicates that total payments made to the tax authorities in regard to these foreign imports and payments in aggregate are $700 million.
There are valid reasons for the differences between the actual payments and the AG high-level assessment.
We were notified by the office of the AG last week that they have not accepted the documentation presented and they have given notice of an intention to recover the $2.0bn from MTN Nigeria.
Based on the detailed review performed MTN Nigeria believes it has fully settled all amounts owing under the taxes in question.
Meta has announced its intention to appeal the decision of the Competition and Consumer Protection Tribunal (CCPT), which upheld a $220 million fine imposed by the Federal Competition and Consumer Protection Commission (FCCPC) over its data practices.
The penalty follows a 38-month investigation conducted by the FCCPC, in collaboration with the Nigeria Data Protection Commission (NDPC), which ran from 2021 to December 2023.
The investigation found evidence of unauthorised data sharing, insufficient user consent mechanisms, and discriminatory practices that treated Nigerian consumers differently from those in other regions.
In July 2024, the FCCPC imposed the $220 million fine on Meta and WhatsApp, citing violations of Nigeria’s data protection and consumer rights laws. Additionally, the ruling mandated corrective actions to ensure that Meta’s business practices comply with Nigerian regulations.
In a decision delivered on Friday, April 25, the tribunal upheld the fine, reaffirming the FCCPC’s authority and investigative processes. The tribunal also ordered Meta to pay an additional $35,000 to cover the costs incurred during the investigation.
However, Meta expressed disagreement with the tribunal’s ruling, stating in a statement on Saturday, April 26, that it would urgently seek to appeal the decision and apply for a stay of execution.
“We are urgently applying to stay the order and appeal today’s decision to avoid any impact to users,” WhatsApp said.
The company also contested the tribunal’s findings, claiming that the ruling misrepresented how WhatsApp operates and contained inaccuracies regarding its data practices.
Competition and Consumer Protection Tribunal has upheld a $220 million fine imposed by the Federal Competition and Consumer Protection Commission (FCCPC) on Meta Platforms Inc. and WhatsApp LLC for data privacy violations in Nigeria.
The Tribunal also awarded $35,000 in investigative costs to the country’s Federal Competition and Consumer Protection Commission .
In a statement issued by the FCCPC, the Tribunal delivered its judgment in the appeal filed by Meta Platforms Incorporated (Facebook) and WhatsApp LLC against the Federal Competition and Consumer Protection Commission (FCCPC), affirming the Commission’s authority and ruling in favour of its actions on nearly all contested issues.
According to the statement by the FCCPC, “The Tribunal specifically determined that the Commission adhered to prevailing laws, fulfilled its mandate, and exercised its powers by the 1999 Constitution (as amended).
“It ruled that the multiple actions by WhatsApp and Meta, for which the Commission made findings of violations, were correctly identified, and that the Commission did not err in making those findings.”
The statement revealed that WhatsApp and Meta’s legal team was led by Professor Gbolahan Elias (SAN), while the FCCPC was represented by Babatunde Irukera.
It added that both legal teams presented their final arguments on behalf of their respective clients on January 28, 2025.
“The FCCPC had on July on July 19, 2024, issued a Final Order imposing a $220 million administrative penalty after concluding that the companies engaged in discriminatory and exploitative practices against Nigerian consumers, the investigation started in 2020.
“The case arose from a 38-month joint investigation initiated by the FCCPC and the Nigeria Data Protection Commission (NDPC) into the conduct, privacy practices, and consumer data policies of Meta Platforms and WhatsApp.
“Dissatisfied with the Order last year, Meta and WhatsApp appealed to the Tribunal, challenging both the legal basis and the findings of the Commission,” FCCPC said.
The Tribunal upheld the FCCPC’s authority and investigative procedures in Meta and WhatsApp’s appeal, resolving most of the contested issues in the Commission’s favour.
It confirmed that the FCCPC acted within its constitutional and statutory mandate, particularly regarding fair hearing, data protection, and consumer rights.
While it dismissed the majority of the appellants’ objections, it set aside one specific order (Order 7) for lacking sufficient legal basis.
While expressing satisfaction with the judgment, Tunji Bello, executive vice chairman/CEO, commended the Commission’s legal team for their exceptional diligence and forensic expertise in assembling evidence and presenting their case.
He reaffirmed the FCCPC’s unwavering commitment not only to protecting the rights of Nigerian consumers but also to promoting fair business practices in line with the FCCPA (2018) and the Renewed Hope Agenda of the Nigerian government.
Nigerian Exchange Limited (NGX), has made history with the listing of Legend Internet Service Plc as the first company in its Telecoms sector and the first company to be listed this year.
Legend’s N2 billion ordinary shares, with a par value of 50 kobo each, were listed at N5.64 per share.
Dr Umaru Kwairanga, chairman of NGX Group, who welcomed Legend’s board and management, commended the company for its successful listing on the Exchange
He highlighted that listing signifies an elevated commitment to corporate governance and provides opportunities to leverage the Exchange’s diverse asset classes for capital raising.
He stated, “As we celebrate this listing, with many more in the pipeline, I commend the management of Legend Internet Plc for this remarkable milestone.
“This bold step demonstrates confidence in your business model and growth vision.
It also marks the formal emergence of a broadband service as a distinct sub-sector on our Exchange.
Legend has evolved from a focused digital network provider to a diversified technology player, achieving significant advancements in broadband infrastructure development and data services.
We anticipate continued growth in the future.
“We are still bringing many companies on board the NGX, including Dangote, NNPC and others.
“As Africa’s leading exchange, NGX has consistently championed innovation, transparency and sustainable value creation through our investment in cutting-edge infrastructure and a comprehensive range of product offerings, spanning equities, bonds, ETFs and derivatives
Speaking at the Facts Behind the Listing Ceremony, Dr Ladi Bada, chairman, Legend emphasised that the company, as the first indigenous telecommunications company on NGX, has substantial value to offer the market.
Bada encouraged Nigerians to embrace the broadband industry, recognizing it as the fastest-growing sector globally.
He noted that the company had been instrumental in laying fiber optic cables connecting 250 homes in the Suleja and Abuja environs.
He expressed optimism that the Exchange would serve as a catalyst to replicate such commendable projects across other regions of Nigeria.
“We are here to create an enabling digital infrastructure to achieve the projected one-trillion dollar economy.
“On this special day, Legend Internet takes a bold step forward, not just for itself, but for the broader ecosystem of technology, infrastructure, and enterprise in Nigeria.
“As we begin this exciting new chapter as a publicly listed company, we do so with humility and boldness.
We remain committed to continuous innovation, expanding our reach, and delivering value to shareholders and society
“A listing on the Nigerian Exchange is more than a financial event. It is a signal and a declaration that a business is ready to be held to the highest standards of governance, performance, and public trust,” he said
Providing insights into the company’s development, Ms Aisha Abdulaziz, chief executive officer of Legend Internet Plc, stated that the company had evolved from an internet service provider to a comprehensive digital service provider.
Abdulaziz noted that with broadband penetration in Nigeria being less than one per cent, Legend Internet was strategically positioned to deepen access
She affirmed the company’s commitment to taking Nigeria’s digital economy to the next level
“When we started Legend, we weren’t just building an internet company; we were building a movement
A movement fueled by the belief that every Nigerian deserves access to premium, reliable, and high-speed internet, regardless of their location or occupation
“From late nights in our first office to laying fiber across Abuja, to launching products that made people’s lives easier and faster, our journey has always been about connections
“Connecting people to opportunities, connecting homes to entertainment, connecting Nigeria to the digital future it deserves. Our journey has always been about a better way to live.
“This listing is a symbol of our commitment to transparency, sustainable growth, and the kind of excellence that outlives hype.
“Legend’s primary focus now is on unlocking digital value at the household level,” she said.
Mr Jude Chiemeka, chief executive officer of NGX, congratulated the company for making the strategic decision to list.
Mr Chiemeka noted that Legend’s listing on NGX now brings the total number of listed securities to 322
Also, Mr Temi Popoola, chief executive officer of the Nigerian Exchange Group, encouraged the investing public to support the newly listed company.
UBA Envisions Footprint in over 100 Countries
Supreme Court Sets Aside N22 Trillion Judgement against Union Bank
EFCC Bans Cash above $10,000 from Leaving Nigeria without Declaration
NCC Vows to Tackle Online Infringement, Block Illegal Music Websites
Over 500,000 Students Apply for NELFUND Loans in 11 Months- CEO
Telecom3 days agoMTN Appoints Egerton Idehen as Chief Broadband Officer
Telecom3 days agoDigital Realty Expands ServiceFabric to Nigeria, Enhancing Global Interconnectivity
General News3 days agoUBA Marks 75 Years of Excellence at 65th AGM
Telecom3 days agoMTN Group Suffers Cyberattack
Telecom3 days agoMTN Foundation Launches Skills Academy to Bridge Nigeria’s Digital Skills Gap
Telecom3 days agoLegend Internet Plc Makes History as First Indigenous Telecom Firm on NGX
- Telecom3 days ago
Tribunal Upholds FCCPC’s $220m Fine against Meta, WhatsApp
E-Financial3 days agoWorld Bank Predicts Rise of Poverty in Nigeria Despite Economic Growth