MTN Backtracks On Lawsuit Now Seeks Out-of-court Settlement
By Iwedi Ojinmah 5 months ago
A senior Advocate of Nigeria (SAN) and counsel to MTN, Mr. Wole Olanipekun, Tuesday, said his client has decided to pursue an out-of-court settlement with the Central Bank of Nigeria (CBN).
The telecommunications company had filed a suit to challenge CBN directive to return the $8.1 billion which the apex bank said was illegally repatriated.
Speaking in court after a hearing yesterday, Olanipekun said his client has approached CBN for an amicable settlement and this was confirmed by Seyi Sowemimo, CBN’s lead counsel, who told the court that the negotiation was already at an advanced stage.
“We have advanced towards settlement and it remains to cross the Ts and dot the Is; it is just for the report of a settlement,” he said. Saliu Saidu, the justice presiding over the case, adjourned till December 12 for a report on the settlement.
MTN had filed a suit seeking an injunction to restrain CBN and AGF from taking further actions to reclaim the alleged debts.
The firm wants the court to hold that CBN lacks the power to determine its civil obligations or penal liabilities. It is urging the court to declare that CBN acted outside its statutory powers when it wrote a letter to it on August 18, demanding a refund of $8.1 billion. It wants the court to hold that the demand was illegal, oppressive, abusive, unauthorised and unconstitutional.
On its part, CBN alleged that the telecoms firm improperly repatriated dividends and requested that MTN should return $8.1 billion to its coffers.
Last August, CBN slammed a total of N5.87 billion fines on four banks and ordered them to refund over $8.13 billion alongside MTN, for what it described as “flagrant violation of extant laws and regulations of the Federal Republic of Nigeria, including the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 of the Federal Republic of Nigeria and the Foreign Exchange Manual, 2006.”
The four banks included Standard Chartered Bank, Stanbic-IBTC, Citibank and Diamond Bank. Announcing the sanctions, CBN spokesman, Mr Related: Second Judge Withdraws From Okorocha’s Certificate Of Return Suit . Isaac Okorafor, said the apex bank’s actions became necessary following allegations of remittance of foreign exchange with irregular Certificates of Capital Importation (CCIs) issued on behalf of some offshore investors of MTN Nigeria Communications Limited and subsequent investigations carried out by the apex bank in March 2018.
“The CBN has, therefore, asked the management of the banks and MTN Nigeria Communications Limited to immediately refund the sum of $8,134,312,397.63, illegally repatriated by the company to the coffers of CBN.
“The breakdown of the penalties shows that the highest fine of N2,470,604,767.13 was imposed on Standard Chartered Bank, while Stanbic IBTC Nigeria was fined N1,885,852,847.45. For its infractions, Citibank Nigeria was penalised N1,265,541,562.31, as Diamond Bank was ordered to pay N250 million,” he stated.
Okorafor explained that the decision of the apex bank followed its thorough investigations into the allegations of remittances by the four banks, of forex with irregular CCIs issued on behalf of some offshore investors of MTN Nigeria.
He stated that the result of CBN’s fact-finding investigations revealed that $3,448,119,321.72 was repatriated by Standard Chartered Bank on the basis of the illegally issued CCIs. Similarly, the sums of $2,632,005,623.78, $1,766,263,212.75 and $348,914,501.30 were repatriated by Stanbic IBTC Nigeria, Citibank Nigeria, and Diamond Bank Plc respectively during the period of 2007 and 2015. Accordingly, he said CBN had directed the affected banks to immediately refund the respective sums to it.
CBN’s investigation further revealed that on account of the illegal conversion of MTN shareholders’ loan to preference shares (interest-free loan) of $399,594,146, the sum of $8,134,312,397.63 was illegally repatriated by the company.
While disclosing that the investigations by the CBN took a while in order to carry out a thorough inquiry and give a fair hearing to all parties involved, Okorafor advised all banks and multinational companies in Nigeria to adhere strictly to the provisions of all extant laws and regulations of Nigeria in their foreign exchange transactions. He warned that failure by the management of banks and companies to abide by the existing guidelines would be appropriately sanctioned, including the denial of access to the Nigerian foreign exchange market.