A general view of the headquarters of South Africa’s MTN Group in Johannesburg, May 27, 2008. South African companies and investors are beginning to use their base in Africa’s biggest and most sophisticated market as a springboard to move into the continent’s fast-growing frontier markets. Picture taken May 27, 2008. To match Feature FRONTIERS/AFRICA REUTERS/Mike Hutchings (SOUTH AFRICA – Tags: BUSINESS)South African mobile phone operator MTN Group flagged a half-year loss on Thursday, blaming a hefty fine in Nigeria and underperformance at home, Reuters reported, quoting Eikon as source.
In June this year, Nigeria reduced the 1. 04 trillion fine it had imposed on the South African company to N330 billion to be paid within three years.
The Nigerian Communications Commission, NCC, had on October 20, 2015, imposed a fine of N1.04 trillion on MTN for its failure to disconnect 5.1 million improperly registered lines within the prescribed deadline. NCC had asked all telecommunication companies to properly register all subscribers as the country battled the Boko Haram insurgency in the northeast and suspicions were rife that the terrorists were using mobile phones to communicate.
While all other companies complies, MTN did not disconnect over five million subscribers who had been improperly registered, fearing revenue losses. NCC reacted by imposing a hefty fine and both government began negotiation immediately after and finally reached an agreement in June this year.
According to an agreement reached with the government, the hefty fine is to be paid within three years and MTN is also mandated to be enlisted on the Nigeria Stock Exchange (NSE).
“After nearly six months of negotiation and re-negotiation over the N1.04 Trillion fine imposed on MTN Nigeria by the Nigerian Communications Commission (NCC) the fine was yesterday (June 9) reduced to N330 Billion,” said Tony Ojobo, the Director of Public Affairs at NCC.
He said: “This amount includes the “goodwill” payment of N50 Billion earlier made by MTN to the government.
“The balance of N280 Billion will be made in six tranches in the following order. By the terms of agreement, MTN will pay N30Billion into NCC’s Treasury Single Account (TSA) with the Central Bank of Nigeria (CBN) 30 days from the date of the agreement dated June 10, 2016.
Other dates of payments include:
- March 31, 2017 -N30Billion;
• March 31, 2018 -N55Billion;
• December 31, 2018 -N55Billion;
• March 31, 2019 -N55Billion and the balance will be in
• May 31, 2019 -N55Billion”
The agreement and resolutions were signed by Executive Vice Chairman (EVC) of NCC, Prof. Umar G. Danbatta, NCC Commission Secretary, Mr. Felix Adeoye, Chief Executive of MTN, Fredinand (Fredi) Moolman and MTN’s Company Secretary, Mrs. Uto Ukpanah, and witnessed by Mr. Tony Ojobo, NCC, Director, Public Affairs; Mr. Usman Malah, Chief of Staff to the EVC, NCC; Ms Helen Obi, Assistant Director, Legal, NCC and Ms. Amina Oyagbola, Corporate Executive, MTN.
He added: “It was also agreed that MTN shall undertake the followings:
- Tender an apology in line with the apology previously tendered in correspondences relating to this matter to the Government of Nigeria and Nigerians within the one month of the execution of this Agreement;
• Subscribe to the voluntary observance of the Code of Corporate Governance for the Telecoms Industry and would ensure compulsory compliance when the said Code is made mandatory for the telecommunications industry; and
• Undertake to take immediate steps to ensure the listing of its shares on the Nigerian Stock Exchange as soon as commercially and legally possible after the date of execution of this Settlement Agreement.
“Both parties agreed that these terms of settlement cannot be altered, varied, annulled or modified in any respect, except by writing duly executed by both parties; and the terms of settlement constitute all the terms and conditions of the settlement and supersede and replace any previous offers, representations and terms”.