By Oji Odu
When Nwanza the little bird dances in the open without fear, it is indeed certain that there are powerful forces secretly beating the drums for it. But when it challenges its god to a fight, will these unseen forces be able to sustain the drumbeats and the tempo? Will they stand and defend Nwanza when the chips are down, or will Nwanza be sacrificed?
This is currently the situation as MTN, on Monday, September 10, 2018, sued the Central Bank of Nigeria, CBN and the Attorney General of the Federation, AGF over allegations of improper repatriation of about $8.1billion and unpaid taxes of $2 billion the duo levied against it. The South African mobile telecommunications giant and the largest mobile telecommunications operator in Nigeria is seeking injunction to restrain them from taking further action in respect of their orders to reclaim the alleged debts.
How far will MTN continue in this misadventure in this country which is gathering momentum every year? Some key players in the case want to be distanced from it, even as the Central Bank of Nigeria (CBN) is said to have already deducted the fines from the accounts of the four affected banks? They include Standard Chartered Bank, Stanbic-IBTC, Citibank and Diamond Bank, would refund various amounts totaling N5.87 billion.
Standard Chartered was asked to refund N2.5 billion; Stanbic IBTC (N1.9 billion); Citibank (N1.3 billion and Diamond Bank (N250 million).
Their offence?.. “Flagrant violation of extant laws and regulations of the Federal Republic of Nigeria, including the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 and the Foreign Exchange Manual, 2006.”
The CBN resolved to sanction the commercial banks following investigations in March 2018 which confirmed allegations of remittance of foreign exchange with irregular Certificates of Capital Importation (CCIs) issued on behalf of some offshore investors of MTN Nigeria.
Details showed about $35.5billion was repatriated by Standard Chartered Bank based on illegally issued CCIs, while about $2.6billion, $1.8 billion and $348.9million fraudulently issued by Stanbic IBTC, Citibank and Diamond Bank respectively between 2007 and 2015.
The Magazine also learnt that the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service (NCS) have indicated that they would rather not get involved in the Federal Government’s current battle with MTN Nigeria. Just as the FIRS is of the opinion that the matter should be handled by the Customs, as it had to do with import duties, Deputy Comptroller, Customs, Joseph Attah, the agency’s spokesperson, also insisted that the NCS had no business with the matter. “Pay your duty and get cleared,” Attah however said.
But why are the FIRS and NCS afraid to come out and clarify this embarrassment that has continued to make the nation a laughing stock in the comity of nations? Who and what are they afraid of? How sensitive is this issue that they do not want to be involved? What is it that even finance guru, Bismark Rewane Chief Executive Officer, Financial Derivatives Company Limited is somehow confused where the problem lies
The Magazine’s findings reveal that the Senate had absolved MTN of any blame following one of its earlier probes and blamed the CBN for allowing the telecommunications company to abuse of its policy regulating capital repatriation. Specifically, the Senate blamed the bank for not bringing up the observed deficiencies of the Foreign Exchange Miscellaneous Monitoring Act, FEMMA.
Adopting the recommendations by its Committee on Banking, Insurance and Other Financial Institutions, the Senate blamed the apex bank for granting some extensions and exemptions which became prone to sharp practices by commercial banks. Should this then be the reason for clearing MTN of such sharp practices against the Nigerian nation? Was this investigation by the Senate Committee on Banking, Insurance and Other Financial Institutions really holistic to clear MTN of any wrong doing on alleged deep financial fraud against the Nigerian state?
The Senate had in October 2016 launched a probe into the allegation that MTN illegally transferred a total sum of $13.9 billion from Nigeria to other countries between 2006 and 2016.
The Red Chambers Committee on Banks, Insurance and Other Financial Institutions had summoned the top actors in the case including the CBN, MTN management, the Financial Reporting Council of Nigeria, three commercial banks and some businessmen over alleged violation of the Foreign Exchange Act to a public hearing.
At one of the Senate hearings, MTN said it failed to comply with the law requiring issuance of Certificates of Capital Importation (CCIs) within 24 hours of conversion because it was a mere “administrative requirement”.
The Senate panel report, submitted and unanimously adopted by the lawmakers, condemned the CBN for its policy role in facilitating the repatriation.
The Senate “condemn the Central Bank of Nigeria for failing in its duty to bring forth those observed deficiencies of FEMMA for amendment rather than granting extensions and exemptions, which became prone to abuses.
“Mandate the CBN to sanction Stanbic IBTC for improper documentations in respect of capital repatriation and loan repayments amounting to $388,195,183 and $199,440,952:07, respectively.
“Mandate the CBN to sanction the activities of Stanbic IBTC Nominees in the matter of shares transfer and splitting for the purpose of dividend repatriation.
“Mandate the CBN to come up with a proposal for the amendment of FEMMA, with a view to ensuring the growth of the economy through massive foreign capital inflow and greater retention of foreign exchange. The amendment is still ongoing in the Senate.
“Direct the CBN to forthwith render periodic status reports to Senate on the performance of foreign investments inflows and outflows.”
Following the MTN’s defence of no wrongdoing when it stated: “The issues surrounding the CCI’s have already been the subject of a thorough enquiry by the Senate of Nigeria. In September 2016 the senate mandated the Committee on Banking, Insurance and other Financial Institutions to carry out a holistic investigation on compliance with the Foreign exchange (monitoring and miscellaneous) Act by MTN Nigeria & Others. In its report issued in November 2017, the findings evidenced that MTN Nigeria did not collude to contravene the foreign exchange laws and there were no negative recommendations made against MTN Nigeria”, not a few Nigerians believe that the company is about to go through another vicious circle that may at the long run be its undoing.
In a chat with the Magazine, Elias Eboh, a Finance expert said that the South African telecommunications company is gradually biting more that it can chew.
According to him: “ Just like in the case about three years ago when it was fined over $5 billion for SIM registration fraud, it first declared it was innocent, brazenly claiming that the Nigerian Communications Commission (NCC) cannot assume and usurp the functions of the state . However, when the Federal Government increased the pressure by getting a court injunction to freeze its accounts in Nigerian banks, it went on its knees and opted for out of court settlement.
“ The same is also about to play out again. It wants to use the suit to see whether government would pipe down. Unfortunately, I don’t believe so, more especially as they are scouting for funds either for development or 2019 election. Everyday is for MTN, but I believe that Governments ‘One day’ is now.”
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