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MTN surges as Nigeria softens tone on $8.1bn claim

Wireless carrier has provided additional information to Nigerian authorities that may lead to an ‘equitable resolution’.

MTN Group Ltd.’s shares rose the most in more than six months after the Nigerian central bank softened its stance over claims that Africa’s biggest wireless carrier illegally transferred $8.1 billion out of the country.

The Central Bank of Nigeria made the accusation late last month, plunging the South African company into a crisis that’s wiped almost a third off its share price. MTN has since provided additional information that may lead to an “equitable resolution,” a spokesman for the authority, Isaac Okorafor, said in an emailed statement late Wednesday.

Four banks — Standard Chartered, Citigroup, Stanbic IBTC and Diamond Bank — have also provided further detail on the transactions that will be reviewed by the central bank, Okorafor said. The quartet were fined about $16 million between them for enabling the allegedly improper transactions.

The latest development suggests there may be a way for Johannesburg-based MTN to make a deal with Nigeria, just as the company did two years ago when it negotiated a $5.2 billion fine down to about $1 billion plus a commitment to list its local business in Lagos. However, that penalty — related to subscribers that weren’t properly registered in the country — also weighed heavily on the share price, which has yet to recover.

The central bank’s statement didn’t refer to $2 billion of back taxes MTN is also accused of owing — a claim that comes from the attorney general’s office.

“While this is a step in the right direction, continued dialogue to reach an amicable resolution is a minimum standard expected by the investment community,” Olusola Teniola, president of the Association of Telecommunications Companies of Nigeria, said. “We look forward to the central bank disclosing the exact reasons for their actions.”

MTN Nigeria said it couldn’t immediately comment.

MTN climbed 7.5% to R78.87 by 9:32 a.m. in Johannesburg on Thursday, its biggest gain since March 8. The stock is still down 27% since the $8.1 billion claim was made on August 29, wiping out almost $5 billion of market value.

MTN’s response to the double accusation was to go to court, saying allegations by both the Nigerian central bank and attorney general are unfounded, malicious and illegal. Chief executive officer Rob Shuter flew to the country to reassure employees of the company’s commitment to the market, MTN’s biggest with about 66 million customers.

The impasse comes five months before Nigerian President Muhammadu Buhari seeks re-election for a second four-year term. He’s pledged to crack down on graft in Africa’s most populous country, including that perpetrated by companies.

© 2018 Bloomberg L.P

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Clueless banana Republic

Irrespective of the final outcome of this newest graft allegations against MTN, the shares of MTN will continue to trade at a huge discount to compensate as premium for the high-risk of the company’s exposure to rogue countries.

In Africa, the biggest warlords run governments, was always so (previously chiefs), will always be so. Nigeria is no exception. Neither is South Africa. Africa is poor for this simple reason

We have too many thieves not warlords, that honor belongs to the evil Bush, Clinton, Obama, Blair, Cameron, Sarkozy, Hollande, Trump, May and Macron

That’s true too of course, here our warlords are thieves too. Thanks for the correction

What is the all excitement about?

“MTN has since provided additional information that may lead to an “equitable resolution,””

No news from the Nigerian Central Bank?

“The Central Bank of Nigeria made the accusation late last month, plunging the South African company into a crisis that’s wiped almost a third off its share price. MTN has since provided additional information that may lead to an “equitable resolution,” a spokesman for the authority, Isaac Okorafor, said in an emailed statement late Wednesday.”

Somehow I suspect that some party did not receive either the amount that was due or else said party became greedy or both – the one thing leading to the other.

There is just no way for MTN to extract such a large amount on the sly. Someone in authority must have approved it and so that is where the little oops could have occurred.

This is just my speculation of course as to the way business is forced to operate in Nigeria. If you do not play the part, the stage gets ripped away from you.

Same playbook as previously. Rumors and innuendo from Nigeria, but nothing verifiable. This will happen periodically.

The press laps it up, and MTN share price yoyo’s. Nigerian authorities are not going to walk away from this without a payout, just a question of how much.

Why didn’t they ask for the documents before going on to the public and blabbing their wide open mouths, in the meanwhile hurting the companies stock price and losing it billions in market value, and doing their own country injustice from what appears like lawlessness and exhortion at the highest levels. This kind of ‘shoot first, and ask questions later, is not good for any one, not Nigeria, not any business (in this case MTN), not for shareholders, and not for anyone who is seriously thinking of investing in Nigeria now or in the future. Government departments need better discipline and well established protocols to address matter involving disagreements. So far Nigeria has exhibited rudimentary understanding of such a need(and that is a complement.

Perhaps the Nigerian authorities have done a “Viceroy” on MTN- sell the share short and fabricate misinformation.

Has MTN and the JSE looked into the short selling of MTN shares before the Nigerian government made their announcements? The Nigerian governing party needs money for the elections. If such evidence can be found it will be a huge embarrassment for the Nigerian government.

Nothing would embaress a failed state and filthy corrupt over populated hell hole. They are a nation of criminals

Business in Africa is inherently risky, but if you can manage to negotiate yourselve through the mirky waters of corruption and manage margins to absorb the natural seepage and buffer yourselves against these black swan events, you might just have a good business. It would not surprise me if someone in the tax office or government ( high enough) did not get the bribe he wanted and then… well we saw what happened..

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