MTN denies paying bribe to reduce Nigerian fine

South Africa’s MTN denied it paid a bribe to Nigerian officials to reduce its fine to 330 billion naira ($1.05 billion) as part of settling a dispute over disconnecting unregistered SIM cards in the West African country.

MTN said in a statement on Friday that there had been allegations that a top official in the Nigerian presidency took a payment towards reducing the fine.

The telecom group was initially fined $5.2 billion last October for failing to deactivate more than five million unregistered SIM cards.

In June, MTN agreed to pay a reduced fine of 330 billion in a settlement with the Nigerian government and said the fine will be paid by MTN Nigeria over three years.

It would be recalled that the issue of reducing the fine to be paid by MTN was enmeshed in controversy. After the Minister of Communications, Barrister Adebayo Shittu, said that the issue of MTN is “a closed matter”, the Senate Committee on Communications immediately said it rejected the terms of agreement between the Nigeria Communications Commission (NCC) and MTN which reduced the fine imposed on MTN by NCC for operational misconducts last year from N780 billion to N330 billion.

The minister said at a function in Ibadan that the Federal Government had decided to put the issue of the fine against MTN behind to attract investments into the country. Shittu said that telecommunications operators in Nigeria must continue to improve on their services, adding: “Nigerians have been paying through thick and thin to enjoy and patronise the operators.

“To whom much is given, much more is expected. The MTN fine is a closed matter. The executive of the Federal Government has taken a decision. They (MTN) have remitted a substantial part of the penalty to them (government). And, as far as I am concerned, it is a closed matter. Nigeria must move on”.

The Senate Committee on Communications was apparently irked by the Minister’s stand and  thereby summoned the Attorney-General of the Federation (AGF) and Minister of Justice, Abubakar Malami; Minister of Communications, Adebayo Shittu; Executive Vice Chairman of NCC, Professor Umar Dambatta; Accountant-General of the Federation, Ahmed Idris, Managing Director/Chief Executive Officer of MTN and the Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, to appear before the Committee on June 23, 2016,  to explain the rationale behind the deal.

The NCC had imposed a fine of N1.04 trillion on MTN over its decision to keep over five million unregistered subscribers in its network last year in violation of NCC Act. However, after sustained pressure from MTN and external forces, NCC reduced the fine to N780 billion before finally reviewing it downward to N330 billion last week.

In its first official reaction, the Committee accused the NCC of short-changing Nigeria in the deal, describing it as a move “that is characterised with suspected criminal tendencies as they were perfected secretly particularly without recourse to due process.”

According to the committee Chairman, Senator Gilbert Nnaji, in a letter dated June 15, 2016, and separately addressed to all parties to the deal, condemned the manner in which the “settlement agreement of N330 billion was reached with MTN out of a whooping N1.04 trillion.”

Part of the letter read thus: “As a committee and representatives of the Nigerian people, we are saddened about this development at a time when the Nigerian economy needs all the available capital infusion to bolster it. It is our strong opinion that Nigeria has been short-changed in this whole process on account of the ridiculous settlement payment plan; coupled with the disparity in the exchange rate regime when the fine was imposed ab initio compared with the current prevailing exchange rate when it was agreed to cut the fine to N330 billion.”

The committee said it was displeased and disappointed that “NCC could engage in such a negotiation that is tainted with a lot of questionable conclusions without the knowledge of the committee.”

“The committee is worried about this development because it is on record that during our last investigative meeting with all the relevant parties to this matter on March 10, 2016, the committee was informed that the case was still in court and that it was adjourned till March 18.

“The committee was not aware of the outcome of the court case neither was it privy to any active negotiation that led to the fine being reduced to N330 billion. It is our concern that Nigeria has been short-changed in this whole process on account of the ridiculous settlement payment plan; coupled with the fact that parties involved in the negotiation were either oblivious of the exchange rate value of the naira to the dollar when the sanction was meted originally compared to current exchange rate regime when the value of the naira is now on the downward slide.

“Consequently, you are hereby invited to appear before the committee on June 23, 2016 at 2p.m. prompt in Room 221, Senate New Building, to shed more light on the issues surrounding the settlement. You are requested to furnish the committee with the following information to guide it in its deliberation: document(s) detailing presidential directive to accede that MTN should pay N330 billion to the Nigerian government as contained in paragraph 1 of your letter.”

The invited officers were directed by the Committee  to come up with document(s) specifying evidence of negotiation including terms of negotiation; parties to the negotiation; modalities for arriving at N330 billion; minutes of negotiation meeting and other relevant information; relevant section(s) of the NCC Act 2003 which empower NCC to impose fines accompanied with sections empowering the commission to reduce fines; detailed reason(s) for the reduction of the fine from N1.04 trillion to N780 billion and later to N330 billion.

Nothing much was heard about the case after the summon.