Friday, February fourteenth, the UN says at least 22 people have been killed in a village in the Northwest region of Cameroon. Over half of those killed were children. No one has claimed responsibility for Friday’s incident but the opposition parties blame the killing on the government.
MTN hit by another Nigerian charge
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MTN has been accused of illegally
repatriating about $14bn from Nigeria, the mobile network operator’s largest
market.
The news sent the share price down about 3%
to close at R119.77. According to a Bloomberg report, Nigeria’s senate said on
Tuesday it would investigate the claim thoroughly.
Africa’s biggest wireless carrier by sales is
accused of repatriating the funds over 10 years starting in 2006, according to
Dino Melaye, the politician who tabled the motion. The four banks involved in
the alleged illegal transfers are Citigroup, Standard Chartered, and Nigerian
lenders Stanbic IBTC Holdings and Diamond Bank.
MTN and Standard Bank Group, which controls
Stanbic, declined to comment.
But analysts expressed doubts about the
veracity of the claims and how this had gone undetected for such a long time,
especially since the Nigerian authorities had tight controls on foreign
exchange.
Mergence Investment Managers’ portfolio
manager Peter Takaendesa said it was difficult to believe that anyone could use
top banks that were heavily regulated domestically and internationally to move
cash out of the country for such a long period without complying with domestic
requirements.
“It would also be quite a surprise if the
allegations are proven correct in the Nigerian market, given the Central Bank
of Nigeria has tightly controlled the foreign exchange market for quite a long
time under the previous foreign exchange policy,” he said.
The accusation comes a few months after MTN
agreed to pay a 330-billion naira (about $1bn) fine to the Nigerian government
and to list its local unit on the country’s stock exchange. That penalty was levied
for missing a deadline to disconnect 5.1-million unregistered customers in the
country.
The initial fine was $5.2bn. MTN’s share
price has fallen more than 37% since the fine was first reported in October.
MyWealth Investments CEO Devin Shutte said:
“Unfortunately, MTN seems to be the gift that keeps taking from shareholders at
the moment.”
The market needed clarity on the details of
these alleged transactions, he said, noting, however, “We can see by the market
reaction that many shareholders are not taking chances on what has already been
a rough ride with the company of late.”
The Nigerian government is under pressure to
raise revenue to improve the ailing economy. There is speculation that some
politicians in the country were unhappy with the reduction of the fine levied
on MTN, and the latest disclosure could be motivated by similar thinking.
“The unfortunate reality is that MTN has made
a concerted effort to improve its corporate governance recently, but this
latest revelation indicates that there might still be a few skeletons in the
closet that need to be dealt with,” he said.
Takaendesa said the continuing negative news
flow from Nigeria reflected badly on MTN, as well as on Nigeria as an
investment destination.
“It is very unlikely that MTN would have
moved all these funds to SA, given foreign exchange shortages in Nigeria,” he
said.
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