MTN faces new tax and regulatory woes in Nigeria
The telecommunications giant says the latest demands by the Nigerian authorities are "regrettable and disconcerting".
Nigeria’s attorney general said this week that a whistleblower prompted an investigation by the country’s central bank into alleged MTN infractions that last week led to a demand for $8.1 billion taken out of Nigeria to be brought back.
In response, MTN issued a statement saying all dividend repatriation out of Nigeria was done on the basis of equity capital and with valid certificates.
They have also issued a demand for taxes which they say MTN incurred over the last decade. The attorney general’s office said in a statement that MTN Nigeria should have paid approximately $2 billion in taxes relating to the importation of foreign equipment and payments to foreign suppliers over the last decade.
Byron Lotter, a portfolio manager at Vestact in Johannesburg, told Reuters:
“These are old issues that have been investigated and closed but now they are being reopened. I’m not surprised that a lot of people are selling and saying ‘these guys are just too volatile, I’m out’. I wonder if MTN are thinking the same.”
This comes two years after MTN agreed to pay more than $1 billion to end a dispute with Nigeria over unregistered SIM cards.
Since last Thursday, MTN shares have dropped by nearly 25 percent.
MTN called the latest demands by Nigerian authorities “regrettable and disconcerting”. The company said:
“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."