Hard times for MTN as shares fall following Nigeria $5.2b fine over SIM registrations
MTN Nigeria has fallen on hard times.
Nigeria’s regulator, the Nigerian Communications Commission (NCC) has imposed a fine of N1.04 trillion on MTN Nigeria in relation to the timing of the disconnection of 5.1 million subscribers in August and September. The amount is the equivalent of $5.2 billion.
The company was fined N200,000 ($1,005) for each unregistered subscriber.
Following the fine, MTN’s shares fell the most in 17 years. MTN’s stock declined more than 12 per cent, the biggest one-day decline since November 1998, to 167 rand.
The fall on Monday is considered the lowest closing price since June 2013 and values the Johannesburg-based company at 308 billion rand ($23 billion). MTN was the biggest decliner in percentage terms on the benchmark FTSE/JSE Africa All Share Index, while also weighing more on the gauge than any other security on that day.
MTN has about 233 million customers in 22 countries in the Middle East and Africa. There are 62 million customers in Nigeria as at the end of September.
Some reports say, MTN executives have flown from South Africa to Nigeria to hold talks with the regulators over the issue.
In early October a five-country investigative reporting project by journalists working under the auspices of Finance Uncovered said the telecoms operator had transferred large sums of money out of Uganda, Cote d’ivoire, South Africa and Ghana into tax havens.
“Although these transfers are badged as payments for management and technical services, in reality much of them end up in a shell company in the tiny Indian Ocean island of Mauritius, where MTN employs no staff.
These fees are counted as a cost of doing business and deducted from taxable profits in the countries where MTN operates outside of South Africa, but questions have been asked about whether these payments are justified,” the report said.
MTN has said it did no wrong in those instances as found by the investigative reporters.
By Emmanuel K. Dogbevi