Nigeria may witness another round of banking crisis unless an amicable resolution is reached between Central Bank of Nigeria (CBN) and MTN, over repayment of $8.1 billion, believed to have been illegally moved out of the country over 10 years by the telecom giant.
The repayment of $8.1 billion, is half of MTN’s market capitalisation, and could threaten its Nigerian lenders.
Access Bank Plc which has a minor holding at MTN group level but was not exposed to the telecoms firm in Nigeria, expects the banking industry to hold its regular committee meeting soon to discuss South African telecoms firm MTN’s repayment on the orders of the CBN.
Herbert Wigwe, Access Bank CEO, told Reuters that he expected a resolution on the matter to avoid a systemic banking crisis given that the repayment is about half of MTN’s market capitalisation, could threaten its Nigerian bankers.
Recall that the CBN also fined four banks, for their role in helping MTN move the money out of Nigeria,
The apex bank said the affected lenders were asked to refund $8,134,312,397.63 for what it described as ‘flagrant violation of extant laws and regulations of the country, including the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 of the Federal Republic of Nigeria and the Foreign Exchange Manual, 2006’.
A certificate of capital importation (“CCI”) is a certificate issued by a Nigerian bank confirming an inflow of foreign capital either in the form of cash (loan or equity) or goods. A CCI is usually issued in the name of the investor within 24- 48 hours of the inflow of the capital into Nigeria in line with CBN’s guidelines.
The four banks that have come under the sledge hammer of the CBN for the violations are Standard Chartered Bank, Stanbic-IBTC, Citibank, and Diamond Bank.
Announcing the decision in Abuja, Isaac Okorafor, CBN’s Director, Corporate Communications, said the actions of the bank became necessary following allegations of remittance of foreign exchange with irregular Certificates of Capital Importation (CCIs) issued on behalf of some offshore investors of MTN Nigeria Communications Limited and subsequent investigations carried out by the apex bank in March 2018.
The CBN has therefore asked the managements of the banks and MTN Nigeria Communications Limited to immediately refund the sum of $8,134,312,397.63, illegally repatriated by the company to the coffers of the Central Bank of Nigeria.
Figures obtained from the CBN indicated that the highest fine of N2,470,604,767.13 was slammed on Standard Chartered Bank, while Stanbic IBTC Nigeria was fined the sum of 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 the sum of N250 million for violating extant rules.
