MTN Seeks Nigeria Court Injunction in $10 Billion Payment Spat

LAGOS (Capital Markets in Africa) – MTN Group Ltd. applied to Nigeria’s Federal High Court to stop the government enforcing $10 billion in claims against the mobile phone company, buying itself some time as it tries to defuse the dispute.

Africa’s biggest wireless carrier repeated a denial that it illegally transferred $8.1 billion out of Nigeria and owed a further $2 billion in back taxes. The crisis has wiped almost a third off MTN’s share price as investors fret over its future in Nigeria, the South African company’s biggest market with about 66 million customers.

“We remain resolute that MTN Nigeria has not committed any offences and will continue to vigorously defend its position,” the Johannesburg-based company said in a statement on Monday.

Nigeria’s payment demands have plunged MTN back into crisis two years after it settled a separate dispute in the country that also hit its share price. In that instance, MTN agreed to pay more than $1 billion for missing a deadline to cut off subscribers who weren’t properly registered in the country.

The latest claims come as Nigerian President Muhammadu Buhari seeks re-election for a second four-year term in February. Buhari has pledged to fight corruption, including cracking down on tax dodgers and companies behaving outside the law.

MTN shares were down 1.4 percent at 73.74 rand as of 4:10 p.m., valuing the company at 139 billion rand ($9.1 billion).

The payment demands were made in the last two weeks by Nigeria’s central bank and attorney general’s office. MTN said it has applied to the Federal High Court of Nigeria seeking an injunction barring them from taking further action to enforce the claims.

The attorney general’s office and the central bank could not immediately be reached for comment.

Source: Bloomberg Business News