After months of being on the end of unpleasant news Africa’s largest telecoms company, MTN, has finally caught a break in Nigeria, its biggest market. It has convinced a local judge not to allow the Nigerian government to freeze its bank accounts.
It follows a record $5.1 billion fine in October, the company sought to overturn the fine despite a 25% reduction to $3.9 billion. The company announced last December that it was challenging the the legal authority of Nigeria’s regulator to impose the fine in court.
Ahead of the court case, Nigerian authorities requested that the company’s accounts be frozen on the grounds that MTN might seek to repatriate funds from Nigeria before the $3.9 billion fine is enforced.
“Unless this honourable court urgently entertains this application, the plaintiff/respondent would move its funds out of Nigeria, being the jurisdiction of this honourable court, and thereby frustrate the enforcement of the fine in the likely event that this honourable court sanctions the imposition of the fine,” Dipo Okpeseyi, counsel to the authorities, said in court.
However, the request was turned down as the judge claimed the authorities had failed to show adequate proof to back up their claims. It represents a small win for the network which has endured a harrowing run in Africa’s largest economy since October. Share prices fell steeply, around $5 billion in market cap was lost and a major boardroom shake-up followed.
Nigeria’s authorities may have good reason to be cautious with regards MTN’s movement of funds. Last October, amaBhungane, a South Africa-based investigative journalism organization, and Finance Uncovered, a global network of journalists, published a story alleging MTN was involved in shifting millions of dollars from its subsidiary companies in Nigeria, Uganda, Côte d’Ivoire and Ghana to companies in Dubai and Mauritius in order to avoid its tax obligations.
MTN remains Nigeria’s biggest operator despite its current issues and recently completed the acquisition of Visafone, Nigeria’s sole remaining CDMA network, in a bid to improve broadband capacity.