30 August 2018 : MTN Group loves the spotlight, even if it has to take the “wrong” path. This is a very interesting marketing ploy. Just a few weeks after the group release d amazing Q2’18 results buoyed by its data usage, the group has come to the forefront again, this time though for all the wrong reasons.
Once upon a time, there was a cellular company group called MTN, which allegedly transferred $ 8.1 billion out of Nigeria illegally with the help of four banks. But, then their happiness of this act doesn't last long, as soon enough, the Nigerian authorities find out and spill water on their evil plans.
When Attorney General Abubakar Malami conducted an audit from a lagos based law firm last year, and started this new investigation.
So bascially, CBN has imposed a sanction as heavy as N 5.87 billion on these four banks that aided MTN, under its regulatory purview for flagrant violation of extant laws and regulations of the Federal Republic of Nigeria, including the Foreign Exchange ( Monitoring and Miscellaneous Provisions ) Act , 1995 of the Federal Republic of Nigeria and the Foreign Exchange Manual, 2006.
These second and third tier banks that are being grilled ( of course no First tier bank would take that risk ) are Standard Chartered Bank, Stanbic-IBTC, Citibank and Diamond Bank.
The plan was a brilliant one, remittance of foreign exchange with irregular Certificates of Capital Importation which was issued on the behalf of an offshore investor of MTN Nigeria Communications Limited. It just had one teeny tiny flaw : It was Illegal.
Consequently, the CBN has demanded that the management of the banks and the MTN group refund the sum of $8,134,312,397.63 to the coffers of the CBN.
Now, lets take a loot on who is most guilty, according to the amount of fines imposed, Standard Chartered Bank was imposed with he highest fine of N 2.47 billion, followed by Stanbic IBTC which was fined a sum of N 1.88 billion. Citibank is supposed to pay a penalty of N 1.26 million, and Diamond Bank will pay “only” N 250 million for violating the extant rules.
But MTN isn't a fresh offender, for the group, this is its repeat offense. About more than two years ago, MTN was fined a sum of N 330 billion by the Nigerian Communications Commissions ( NCC ) for failing to disconnect unregistered SIM cards.
What is interesting is , this issue was actually brought into notice by Dino Melaye , the Senator of Kogi West, who accused the Minister of Trade and Investment for conspiring with MTN to illegally repatriate $ 13.92 billion with he aid of these four Banks. But these allegations were shut down by the MTN CEO.
The eerie things don't end here, as the Apex Bank, which carried out the investigations, has been approving the accounts of these banks for 10 years, and is now claiming that the money was actually being repatriated illegally by MTN through these banks in question.
Obviously this is not going to go well for the shares of the listed Banks, and in turn is just going to create more bearish investor sentiment in the equity market.This negativity will most like derange the the capital inflows, both FPI and FDI to the service sectors ( like insurance ).
This scam isn't just contained in Nigeria, and has gone offshore as well. Cyril Ramaphosa, the South African president used to possess an investment holding company, Shanduka, which is a part of the former and current shareholders in MTN Nigeria , whose names have come up during this forensic audit for the illicit osmosis of billions of dollars in and out of the country.
The forensic audit will most likely also flag South Africa’s Public Investment Corp ( PIC ) as having received an irregular forex clearance exactly around the time it acquired a stake in MTN Nigeria.
So Rampaphosa former investment holding firm sold the PIC stake in 2015. His family trust possessed a 29.6% stake in Shanduka, but when he came deputy president, he disclosed his shareholding.
This whole thing is an appalling situation, and some people in CBN are also liable for passing this transaction. Nigerian subsidiaries of reputable International Banks like Citi bank and Standard Chartered have crated a very difficult scenario for their parents.
Reporting for EasyKobo on Thursday ,30 August 2018 in Lagos, Nigeria