Nigeria plays hardball with MTN in court

Nigeria’s central bank said MTN Group should not be given an injunction that would stop the wireless carrier from having to transfer US$8.1-billion back to the West African country.

The Johannesburg-based mobile phone company should pay 15% annualised interest on the sum until the courts make a judgment, and 10% from then until the whole amount is paid, the Central Bank of Nigeria argued in documents filed with the Federal High Court in Lagos.

The central bank alleged in late August that MTN and four of its banks — Standard Chartered, Citigroup., Stanbic IBTC and Diamond Bank — illegally repatriated the money from Nigeria. MTN sought an injunction in early September to buy itself time and fight the claim in its biggest market, which wiped as much as 36% off its market value.

The transfers “may have been premeditated and contrived as a scam to make and maximise profits, defraud the Federal Republic of Nigeria and to enjoy unlimited foreign exchange income perpetually from a single investment without complying with the foreign exchange laws and regulations of Nigeria,” the central bank said in the documents.

A spokesman for the central bank, Isaac Okorafor, didn’t answer calls to his mobile or immediately respond to a text message requesting comment.

The court filings suggest the regulator is not prepared to back down over its allegations, despite central bank governor Godwin Emefiele saying last week that the dispute would be resolved soon and that “everyone will be happy”. Okorafor said shortly beforehand the two sides were in talks that could lead to an “ equitable resolution”.

MTN’s shares fell for the first time in five days on Thursday, declining 2.5% to R87.30. That extended their fall since the central bank made its accusations to 19%. Yields on $750-million of bonds due in 2024 climbed 13 basis points on Thursday to 6.85%.

MTN is separately facing a claim from Nigeria’s attorney-general that it needs to pay about $2-billion in back taxes, which the company also disputes. Chief financial officer Ralph Mupita said in an interview that the two issues may cause it to scrap a planned listing of its Nigerian unit in Lagos.  — Reported by Yinka Ibukun and Paul Wallace, (c) 2018 Bloomberg LP