The plan to list MTN Nigeria in an initial public offering (IPO) is under threat after the Central Bank of Nigeria (CBN) ordered the South African telecoms giant to hand over $8.1 billion allegedly sent abroad illegally.
Nigerian Communications Commission (NCC), recently insisted that MTN must list on Nigeria’s stock exchange on or before May 2019 as contained in the agreement over the mega 2015 fine settlement between the regulator and the telecom company.
The listing of the telecom giant may be put on hold as the CBN last week alleged that MTN used improperly issued certificates to transfer funds out of Nigeria after the telecoms giant converted shareholder loans in its Nigerian unit to preference shares in 2007.
The apex bank went ahead to order MTN to return the $8.1 billion. The money is more than half of MTN’s market capitalization
MTN denies the allegations.
CBN said that bankers to MTN had failed to verify that the telecoms group had met all the country’s foreign exchange regulations.
Africa’s biggest telecoms company had previously said it aimed to list this year in its largest market, the continent’s most populous country of 190 million people, as it seeks to expand mobile services to boost margins and access new revenue streams.
In an emailed statement, Rob Shuter, MTN Group Chief Executive said: “The implementation of our IPO has always been subject to satisfactory market conditions and this event will potentially make it complicated for us to conclude the process.
“Despite this, we have instructed our advisors and our teams on the ground to continue at full pace,” he said.
Earlier this year Shuter told Reuters plans for the Nigerian listing were at an advanced stage and it should be concluded this year if market conditions are appropriate.
The demand by Nigeria’s central bank is the latest setback for MTN in Nigeria, coming two years after it agreed to pay more than $1 billion to end a dispute in Nigeria over unregistered SIM cards.