The CBN had ordered the four commercial banks operated by MTN to suspend dividend payout from Nigeria. The banks are Standard Chartered Bank, Stanbic IBTC, Diamond Bank and Citi Bank. But CBN Spokesman, Isaac Okorafor, said yesterday that he was not aware of the order.
The crux of the allegation is that MTN did not obtain certificates declaring it had invested foreign currency in Nigeria within a 24-hour deadline stipulated in a 1995 law and therefore the repatriation of returns on those investments was illegal.
MTN runs the biggest wireless phone network in Nigeria, which generates a third of its annual sales. The telecoms firm had this year, agreed to pay a reduced fine of N330 billion ($1.08 billion) to end a long-running dispute over unregistered SIM cards in Nigeria.
The South African firm has also delayed its long-awaited listing on the Nigerian Stock Exchange (NSE), and no explanations from the firm or the exchange for the delay.
Shares in the company have fallen by more than 14 per cent to their lowest level in more than six years since the latest issue surfaced on September 27.
But shareholders, who spoke on the development, criticised the CBN’s decision as high-handed, considering that the dividend is shareholders’ benefits from their investment.
The President, Renaissance Shareholders Association of Nigeria, Timothy Olufemi, described the suspension of the dividend as ‘uncalled for,’ noting that dividend declared is a debt that must be paid by the firm.
“Well, the accusation may be due to payment of cash dividend to foreign shareholders in dollars without due approvals. But, we do not see any reason for the suspension of cash dividend if not that they have done something wrong. It is uncalled for. Dividend must be paid when declared. It is a debt,” he said.
The President, Ibadan Zone, Shareholders Association of Nigeria, Sola Abodunrin, said: “If the dividend has been declared in an annual general meeting, MTN has no right to suspend it. The investigation that is going on is a different thing entirely. A dividend that has been declared must be paid.”
Similarly, the President, Constance Shareholders Association, Shehu Mallam Mikail, who explained that MTN has no right to suspend shareholders’ dividend, noted that the telecoms giant is making profit and getting good returns from Nigeria.
He urged the regulatory authorities to ensure that multinationals operating in Nigeria complied with the rules so as to protect investors’ rights.
Mikail noted that “The illegal transfers do not concern the issue of dividend payout and MTN can only fish out those concerned in the transfer saga and it should not stop the payment of dividend to shareholders because it is an investment.”
According to the President, Association of Telecommunications Companies of Nigeria (ATCON), Olushola Teniola, the CBN cannot stop a legally registered company from declaring dividends or making dividend payments, unless there is evidence of criminal activity or a court order stipulates this in rare cases.
But the President, Ibadan Zone Shareholders Association of Nigeria, Sola Abodunrin, believed the suspension should not affect MTN from listing next year as planned.
According to him, the agreement to list was part of conditions given when they were negotiating a reduction in their fine, “so as a responsible company, I do not think they will renege. Many Nigerians are looking forward to their listing.”
Timothy Olufemi, however, believed strongly that the suspension would affect MTN’s listing next year.
The South African telecoms firm in the letter to its shareholders, confirmed that “MTN Nigeria, four commercial banks, certain MTN Nigeria directors and shareholders, the Central Bank of Nigeria and others appeared before the Senate on October 20, 2016 at the outset of this investigation.
“The allegations are that $13.97 billion was repatriated illegally by MTN Nigeria through its bankers. MTN Nigeria and its bankers are cooperating with the investigation with a view to resolving the matter as expeditiously as possible.
“In the interim, the CBN has instructed the banks to suspend any remittance of dividends until further notice. MTN Nigeria continues to refute the allegations that MTN Nigeria had improperly repatriated funds from Nigeria.
“Consequently, MTN Nigeria will strongly defend any action that would be prejudicial to its interest. MTN Nigeria has no intention to make any dividend payments over the next six months.”
Senator Dino Melaye blew the lid that MTN in connivance with the Minister of Trade and Investment, Okechukwu Enelamah, and four commercial banks exploited the Nigerian financial system to illegally move $13.97 billion out of the country without the required authorisation.