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MTN Slashes Nigeria Fine

MTN Slashes Nigeria FineMTN Slashes Nigeria Fine

Global telecoms giant MTN, part owner of MTN-Irancell has hired former US Attorney General, Eric Holder, to help reduce a $3.9 billion fine imposed in Nigeria over unregistered SIM cards.

According to Reuters, after repatriating years of profits from following the removal of banking hurdles, the company was told  to pay $3.9 billion by the Nigerian government.

Now the company, with the help of the American lawyer has managed to slash that mega bill in half.  

The entrance of Holder, who stood down as attorney general last year after presiding over some of the largest corporate settlements in American history, marked a change of strategy for the South African company.

MTN dropped a three-month legal challenge against the fine and, according to government sources and letters seen by Reuters, asked Nigerian Attorney General Abubakar Malami to put forward a proposal for a reduced fine to the communications regulator, the official authority in the dispute.

The regulator, the Nigerian Communications Commission, rejected the proposal as unjustifiable, documents show, but three months later it accepted a broadly similar deal.

MTN, Holder, Malami and the NCC all declined to comment on the negotiation process.

There is no indication that any individuals acted improperly, and companies have often reached settlements with regulators in Nigeria. Lawmakers have however criticized the opaque nature of the settlement process, saying it set a precedent for other firms dealing with Nigerian authorities.

The 780 billion Nigerian naira fine, or $3.9 billion at the exchange rate at the time, was set by the NCC in December over MTN’s failure to deactivate more than five million SIM cards not registered by customers. Nigeria has been trying to halt the use of unregistered cards over concerns they are being used for criminal activity, including by militant group Boko Haram.

MTN, Africa’s biggest telecoms company, initially launched a high court challenge against the fine, arguing the watchdog had no legal grounds to order it. The law states that the NCC does have the right to impose such a penalty. In February, however, MTN withdrew the lawsuit and paid a “good faith” payment of 50 billion naira to the government which it said was part of efforts to reach an amicable settlement and would go towards the eventual fine agreed.

The NCC said at the time that it had not agreed to enter into any talks with MTN and that it stood by the 780 billion naira penalty.

Financialtribune.com