MTN denies Meleye’s allegation of illegal transfer of $14bn

MTN Group Limited has said that it “strongly refutes” an accusation by Nigerian lawmakers that the company illegally moved almost $14 billion out of the country, as the company tries to quell the latest controversy in the country.

MTN Nigeria Chief Executive Officer, Ferdi Moolman said in a statement on Wednesday: “The allegations made against MTN are completely unfounded and without any merit,”

MTN is accused of repatriating the funds over 10 years starting in 2006, according to Senator Dino Melaye, the Nigerian politician who proposed the motion on Tuesday. The Senate has said that it will thoroughly investigate the claim. The four banks alleged to have been involved in the illegal transfers are Citigroup Inc., Standard Chartered Plc,  Stanbic IBTC Holdings Plc and Diamond Bank Plc.

The fresh accusations come a little over three months after Johannesburg-based MTN agreed to pay a 330 billion naira ($1 billion) fine in cash to the Nigerian government for missing a deadline to disconnect customers. That settlement also included a pledge to list the Nigerian unit on the local stock exchange. In July, MTN appointed units of Citigroup and Standard Bank as advisers for the listing.

MTN share has been reported to have falling by 0.2 percent to 119.54 rand by 9:50 a.m. in Johannesburg on Wednesday.  it declined 3.4 percent after the fresh allegations were reported on Tuesday. The stock is down 37 percent since the fine was imposed in October.

“We cannot blame the market for reacting to a story like this,” Peter Takaendesa, a money-manager at Mergence Investment Managers in Cape Town, said by phone. “The amounts are quite material and the company needs to give the market more concrete information.” Bloomberg report said.

Nigeria’s telecommunications regulator on Tuesday blocked the carrier’s attempt to take over internet spectrum owned by closely held Visafone, which it had agreed to buy in January.

The impact of the developments on the planned listing is still unclear, Takaendesa said. MTN is targeting a listing of the Nigeria unit in 2017, “subject to suitable market conditions,” the company said in July.

It was in the new on Tuesday that the Minister of Industry, Trade and Investment, Dr Okechukwu Elenemah, Standard Chartered Bank, Stanbic IBTC as well as Citi Bank and Diamond Bank have been said to have aided MTN to loot $13.92 billion. Senator Deno Melaye raised the issue in the upper chamber.

According to the lawmaker, MTN used the minister, Elenemah, and four commercial banks to move $13.92 billion out of Nigeria which is 50 per cent of Nigeria External Reserves without compliance with subsection (1) of certificate of capital importation.

Melaye, the Senator representing the  Kogi West who is alsothe Chairman Committee on FCT who disclosed this while reading his motion on “unscrupulous Violation of the Foreign Exchange  (Monitoring and Miscellaneous) Act”, said the allegations cannot be waved aside.

The Senate resolved to investigate what it called “unscrupulous violation of the Foreign Exchange (Monitoring and Miscellaneous) Act” by a serving minister, of Trade and Investment, MTN Nigeria, four banks and six other persons.

The Senate noted with serious concern the alleged illegal repatriation of $13.92 billion out of the country by MTN through its bankers.

Lawmakers recalled that MTN was incorporated in Nigeria as a private limited liability company on November 8, 2000, obtaining its operating license with $284.9million on February 6, 2001.

It was observed that MTN did not request for certificate of capital importation from its bankers – Standard Chartered Bank – within the regulatory period of 24 hours of the inflow even as it was discovered that the Central Bank of Nigeria (CBN) was not also notified of the inflow by Standard Chartered Bank within 48 hours of receipt and conversion of the proceeds to Naira as required by extant regulations.

Senate was pained that the Nigerians including the serving minister, who MTN used in moving $13.92 billion out of Nigeria, which is over 50% of the country’s External Reserves, floated and incorporated offshore Special Purpose Vehicles (SPVs) in Cayman Island, Mauritius and British Virgin Island.

Accused along with Enelamah are Dr. Pascal Dozie, Ahmed Dasuki, Gbenga Oyebode, Babatyunde Folawiyo, Mohammed Sani Bello, and Victor Odili, who were said owned different offshore entities.

The Senate was also alarmed that the Minister of Industry, Trade and Investment, who is said to be the owner of Celtelcom Investment Limited with the address: No. 608 St. James, Denis Street Port-Lewis in Mauritius, purportedly claimed to invest in MTN on February 7, 2008, got certificate of capital importation and filled form ‘A’ on the same date, closed his investment in Nigeria after receiving dollars payment for repatriation to New York same day.

The Senate has consequently mandated its Committee on Banking, Insurance, and other Financial Institutions to carry out a holistic investigation into the matter and report back.