- MTN denies repatriating $8.1bn
- Telecoms firm, Diamond, Stanbic –IBTC shares fall
The Central Bank of Nigeria (CBN) may withdraw the licence of any of the four Deposit Money Banks (DMBs) slammed with heavy sanctions for allegedly repatriating funds with irregular Certificates of Capital Im-portation (CCIs) issued on behalf of some offshore investors of MTN Nigeria Communications Limited if the lenders challenge the decision in court. A former deputy governor of the apex bank made the disclosure yesterday in an interview with New Telegraph.
The ex-CBN official, who asked not to be named, told New Telegraph last night that the regulator may have sanctioned these banks to serve as a deterrent to other DMBs that would be tempted to commit such forex breaches, which is tantamount to ‘economic sabotage’ in future. Specifically, he said if the erring banks fail to, or are unable to retrieve the funds from MTN, the apex bank may debit the lenders’ accounts domiciled with it. Explaining why any of the erring banks would lose its operating licence if it challenges the CBN and loses the case in court, he cited a similar case in the United States of America – where a bank had dragged the Federal Reserve Bank (Fed) to court, lost the case and the Fed withdrew the lender’s licence.
The banking watchdog had, on Wednesday, ordered Standard Chartered Bank, Stanbic-IBTC, Citibank, Diamond Bank and telecoms giant, MTN Nigeria Communications Limited, to immediately refund $8.1 billion for violating foreign exchange regulations as well as the country’s extant laws. It also slammed a total of N5.87 billion fines on the DMBs for the breaches. CBN’s Director, Corporate Communications, Mr. Isaac Okorafor, who made the announcement, said the action of the regulator became necessary following allegations of remittance of foreign exchange with irregular CCIs issued on behalf of some offshore investors of MTN Nigeria Communications Limited and subsequent investigations carried out by the banking watchdog in March 2018.
The highest fine of N2,470,604,767.13 was slammed on Standard Chartered Bank, while Stanbic IBTC Nigeria was fined N1,885,852,847.45. For its punishment, Citibank Nigeria was penalized in the sum of N1,265,541,562.31, just as Diamond Bank was directed to pay N250 million for violating extant rules. Specifically, the CBN figures show that while the sum of $3,448,119,321.72 was repatriated by Standard Chartered Bank on the basis of the illegally issued CCIs, the amounts 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 2007 and 2015.
Last year, the Attorney General of the Federation and Minister of Justice, Mr. Abubakar Malami, had also written to the CBN Governor, Mr. Godwin Emefiele, notifying him that it had mandated a firm to carry out a comprehensive audit for the recovery of funds due to the Federal Government with respect to illegally repatriated export revenue by MTN and the banks.
However, the telecoms giant has denied the CBN’s allegation. In a statement issued yesterday by Mr. Funso Aina, Public Relations Manager, Corporate Affairs/Corporate Relations, MTN pointed out that the issues surrounding the CCIs had already been the subject of an enquiry by the Senate. He stated: “MTN Nigeria received a letter on August 29 from CBN alleging that CCIs issued in respect of the conversion of shareholders’ loans in MTN Nigeria to preference shares in 2007 had been improperly issued. As a consequence, they claim that historic dividends repatriated by MTN Nigeria between 2007 and 2015, amounting to $8.1 billion, need to be refunded to the CBN.
“MTN Nigeria strongly refutes these allegations and claims. No dividends have been declared or paid by MTN Nigeria other than pursuant to CCIs issued by our bankers and with the approval of the CBN as required by law. “MTN Nigeria, as a lawabiding citizen of Nigeria, is committed to good governance and to abide by the extant laws of the Federal Republic of Nigeria. The reemergence of these issues is regrettable as it damages investor confidence and, by extension, inhibits the growth and development of the Nigerian economy.
We will engage with the relevant authorities and vigorously defend our position on this matter and provide further information when available,” the company said. Similarly, in a statement to the Nigeria Stock Exchange (NSE), signed by the Group’s Company Secretary, Chidi Okezie, Stanbic IBTC said: “Stanbic IBTC Holdings Plc., member of Standard Bank Group, has been informed by its banking subsidiary – Stanbic IBTC Bank Plc. (the “Bank”) that penalties have been imposed on the bank by the CBN pursuant to a review of transactions relating to the remittance of foreign exchange on the basis of certain ‘irregular’ capital importation certificates issued to MTN Nigeria Communications Limited.
“The bank is holding further engagements with the CBN, in relation to the issues it has raised. Please be assured that the above does not impact on your ability to continue to conduct your various business and corporate transactions with Stanbic IBTC Holdings or any of its subsidiaries, including the bank.” Meanwhile, 24 hours after the CBN announced the penalties, MTN Group’s shares plunged as much as 23 per cent to a nine-year low. At trading on the Johannesburg Stock Exchange, MTN shares were down 21.4 per cent at 84.35 rand, after touching 83 rand, a level last seen in 2009. Also, on the NSE, Diamond Bank Plc. shed 13 kobo or 9.35 per cent to close at N1.26 per share from N1.39 recorded the previous day, while Stanbic IBTC Plc. declined by N1.25 or 2.58 per cent to close at N47.25 per share as against N48.50 posted the previous day.
.new telegraph
