MTN Earmarks N118 Billion For Settlement Of Fine

Parent company of MTN Nigeria, MTN Group, has expressed confidence that the N780bn fine imposed on its Nigerian subsidiary by the Federal Government will be reduced and has set aside $600m (N118.2bn at the official exchange rate of N197 to a dollar) for the total settlement of the fine.

The firm had last week paid N50 billion to the government and on Thursday expressed the hope of paying up the anticipated balance of N68.2bn before the end of this month.

While announcing the group’s results in South Africa on Thursday, MTN said that it might also reduce its 2016 dividend should more funds be needed to pay the fine.

The total provision accounts for only about 15 per cent of the total fine, which was imposed by the NCC after the telecoms company failed to cut off Subscriber Identification Module cards that were not properly registered.

Its Nigerian subsidiary said the provision was set aside in the group financial results, and was in accordance with the Principle of Prudence in generally accepted accounting standards.

The Corporate Executive, MTN Nigeria, Amina Oyagbola, said, “MTN’s auditors have required that the company make a provision in line with the International Financial Reporting Standards.”

The Executive Chairman, MTN Group, Mr. Phutuma Nhleko, also told Reuters on Thursday that the firm might list its Nigerian unit on the Nigerian Stock Exchange once it had resolved the fine issue with the Federal Government.

Nhleko said that the company was continuing settlement talks “in an attempt to ensure an amicable resolution in the interest of MTN Nigeria, its stakeholders and the Nigerian authorities.”

Commenting on the company’s financial statement in the country for 2015, the Chief Executive Officer, MTN Nigeria, Mr. Ferdi Moolman, said while weak economic conditions and heightened regulatory pressure impacted performance, “MTN continues to invest in Nigeria for the long term.”