Court fixes date to hear MTN’s suit against CBN in $8.1bn transfer

A hearing in the court case between MTN and the Central Bank of Nigeria (CBN) in a disagreement over the alleged repatriation of $8.1 billion by the telecommunication company has been set for October 30, MTN’s lawyer, Wole Olanipekun, has said.

Olanipekun told Reuters on Friday that MTN denied claims that it depleted Nigeria’s foreign exchange reserves.

Recall that CBN had in late August alleged that MTN repatriated a total of $8.1 billion from the country through illegal means.

The financial regulator further directed the telco to refund the money and imposed a combined fine of N5.87 billion on four banks – Standard Chartered Plc, Citigroup Inc., Stanbic IBTC Plc and Diamond Bank Plc – that allegedly aided the process.

Nigeria is MTN’s biggest market and accounts for a third of its annual core profit. This explains why the claim which led to the dispute between the two parties wiped as much as 36 percent off MTN’s market value within two weeks.

The CBN had said in its counterclaim to the court that MTN contributed to depleting the country’s reserves through the purchase of dollars via unapproved certificates. MTN however denied any wrongdoing.

Crude oil is Nigeria main source of foreign exchange earnings, the nation’s external reserves was greatly depleted in 2016 following the drop of crude oil prices in the international market.

This contributed to the sharp drop in the value of Naira and further led the country’s economy to a recession in the same year, which the country emerged from last year.

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MTN said in a court filing on Thursday that it paid the naira equivalent to purchase a total of $8.1 billion from CBN in several tranches over a nine-year period and that it did not negatively impair the reserves.

CBN is burning the nation’s reserves to keep the naira stable. The International Monetary Fund (IMF) had last week cautioned the nation on the current depletion in its foreign exchange reserves but CBN Governor, Godwin Emefiele, said it was better to maintain stable exchange rate to avoid Naira depreciation than to build foreign reserve buffers.

Data from CBN on Friday showed that Nigeria’s foreign exchange reserves have dropped over $5 billion since July 5 to reach $42.78, its lowest level in eight (8) months.

CBN officials met with MTN and the four affected banks this week to discuss the dispute as the regulator claimed it was looking for a resolution.

Last Wednesday, Reuters quoted the Minister of Information and Culture, Lai Mohammed, as saying that the CBN and MTN could soon agree a deal.

According to Olanipekun, a separate hearing between MTN and the Attorney General of the Federation over an alleged $2 billion unpaid tax bill has been scheduled for November 8 at the same court in Lagos.

 

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