Nigeria: MTN fine and the N330 billion controversy

Today – ceteris paribus – the Minister of Communications, Mr. Adebayo Shittu; Executive Vice Chairman, Nigerian Communications Commission (NCC), Professor Umar Danbatta; and the Minister of Justice/Attorney-General of the Federation, Mr. Abubakar Malami, either by themselves or represented by senior officials from their establishments, would appear before the House of Representatives for slashing the fine the Federal Government slammed on Mobile Telecommunications Network (MTN), one of the dominant, multinational Global System for Mobile communications (GSM) companies operating in the country. The NCC, in October last year, stung MTN with a $5.2 billion (over N1.04 trillion) fine for MTN’s failure to disconnect about 5.1 million subscribers with unregistered Subscriber Identity Module (SIM) cards bought before January 2012 on or before the scheduled August 2015 disconnection deadline given by NCC.
The bill did not go down well with the telecommunication behemoth. Its initial response to the Nigerian government’s axe was to sack its Chief Executive Officer (CEO) in Nigeria, Mr. Michael Ikpoki; followed by top management reshuffles in its office in South Africa. Since then, MTN has been looking for ways to wriggle out of the selfinflicted bill which its arrogance and contempt for Nigerian laws spewed on its head. The telecoms magnet had gone to court to challenge the fine and later withdrew. Last February, MTN withdrew the case it instituted against NCC and paid N50 billion representing its ‘goodwill’ to get the FG on the negotiation table.
That was after MTN pulled the trick of hiring a former United States’ Attorney–General, Mr. Eric Holder, currently with a private law firm in US, to help challenge the fine and accelerate negotiations; a move widely interpreted as its flaunt of America’s vested interest in the case with a view to intimidating the Nigerian government. Indeed, MTN’s spirited battle to water down the fine had earlier yielded a 25% cut, which brought the bill to roughly N780 billion from N1.04 trillion.
The latest heard about the development, however, is that the MTN has managed, apparently through intense pressure on the FG, to reduce the fine from N1.04 trillion to N330 billion, inclusive of the N50 billion it paid as goodwill gesture, which would be settled through a staggered payment schedule that would end in May 31, 2019.
The company, according to reports, will pay N30 billion into NCC’s Treasury Single Account (TSA) 30 days from the date of the agreement dated June 10, 2016. On March 31, 2017, it will pay another N30 billion; and on March 31, 2018, it will pay N55 billion. By December 31, 2018, MTN will pay N55 billion; and finally on March 31, 2019, it will pay another N55 billion to bring its nightmare to an end. But members of the House of Representatives are not happy that respite has come the way of the GSM operator, hence their invitation to the aforementioned public figures to appear before them today.
The Chairman, House of Representatives Committee on Telecommunications, Rep Saheed Fijabi, told the media in Abuja last week that it was unacceptable that the fine was crashed when the House Committee investigating the alleged MTN offence had not concluded its investigations.
“The proposal to pay the sum of N300 billion as against the fine of N1.04 trillion… is not supported by any verifiable justification. I wonder why the sudden change of mind”, Fijabi lamented. The impunities of multinational companies operating in Nigeria, whether in the oil or other sectors, are quite distressing.
International best business practice demands that foreign investors in the country respect the laws of the land and accord respect, as they would to their nationals, to their Nigerian employees. But this has scarcely been the case. The Nigerian government should desist from playing the fool or the ostrich game while multinationals rip off the country and its citizens; ride roughshod on the nation and its laws; and perpetrate crimes in Nigeria they dare not contemplate in their home countries except they were ready to pay dearly in return. While we stand against such infractions, we implore the House of Representatives to give the FG the benefit of the doubt in this matter. But the Reps should be alert to ensure such impunity festers no more.
The FG should insist on using all legitimate means to make multinational firms comply with Nigerian laws and render services that are of global standard and at best price to Nigerians. But no impression should be given that Nigeria is luring foreign investors with the right hand and bullying on or scaring them away with the left.


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By Sydney Chesterfield on June 20, 2016 · Posted in Reports, Trends

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