MTN Group Woes Continue

It has been reported from multiple sources including Business Day Live that MTN Nigeria is once again in the cross-hairs of the Nigerian government. It appears MTN have taken a cue out of Facebook and Google by repatriating $13.92billion from Nigeria. MTN Nigeria is the countries largest Mobile Network Operator with 57 million subscribers.

The fresh allegations of money laundering have been raised by the Nigerian senate. According to the senate, the illegal repatriation of money started in 2006. According to Dino Melaye, the politician who proposed the notion, four banks assisted with the illegal transfers, Citigroup, Standard Chartered, and Nigerian lenders Stanbic IBTC Holdings and Diamond Bank. In a statement, Dino Melaye said:

“MTN Nigeria paid a sum of $284.9 million on the 6th of February, 2001, to purchase their licence of operations in this country. Between 2006 and 2016, through four Nigerian Banks and a serving minister of the Federal Republic of Nigeria, MTN moved over $12 billion out of Nigeria. That is about half of our external reserves. If I get the nod of the Senate I will want to bring a substantive motion on the next legislative day with substantiated facts to buttress this position.”

The notion alleges MTN worked with the banks to repatriate $4.87billion, $5.72billion, $2.98billion and $0.35 billion. The claim states the repatriation was facilitated by Nigeria’s Minister of Industry, Trade and Investment, Dr. Okechukwu Enelamah. Several unanswered questions have been raised because Nigeria’s Central Bank tightly controls the flow of foreign currency in and out of Nigeria. Mergence Investment Managers’ portfolio manager Peter Takaendesa said

“It would also be quite a surprise if the allegations are proven correct in the Nigerian market, given the Central Bank of Nigeria has tightly controlled the foreign exchange market for quite a long time under the previous foreign exchange policy,” he said.

MTN Nigeria have denied the allegations with MTN Nigeria’s Chief Executive Officer saying:

“The allegations made against MTN are completely unfounded and without any merit,”

With the Nigerian economy in recession, and oil prices stagnant the country is struggling economically. This could be a new revenue source yet unexplored by other Governments, tax blue chip companies. MTN is currently recovering from the Nigerian sim registration scandal where the fine was dropped from over $5billion to $1.7billion. In its largest market, MTN needs to make peace with the government or the group will struggle to prop up its Nigerian operation.

Whilst the accusation does not hold much credence MTN as a brand is plagued by grey, underhand dealings across its markets including:

• Aiding the Iranian government to violate human rights
• Using bribery to win the Turkcell license in Turkey
• The botched LUSE registration through Ikulileni in Zambia

MTN as a Group needs to rethink their strategy before it becomes a culprit of weak corporate governance.