Nigeria has suspended talks with MTN Group Ltd. about a record $3.9 billion fine on the wireless company indefinitely while the country’s House of Representatives completes an investigation into the size of the penalty and how it was delivered.
The lawmakers “have set up a committee to investigate the MTN saga and they are still on it,” Victor Oluwadamilare, spokesman for Nigeria’s Ministry of Communications, said by phone from Abuja, the capital, on Friday. “Until they are through with it, nothing can be done.”
The delay will frustrate Johannesburg-based MTN as it seeks to resolve a fine that was levied in October for missing a deadline to disconnect customers deemed unregistered in the country, which is battling an Islamist insurgency. The company’s stock has fallen by almost a third since the penalty was made public, costing MTN the title of Africa’s biggest wireless company by market capitalisation to crosstown rival Vodacom Group Ltd.
Executive Chairman Phuthuma Nhleko returned to the helm in November for a six-month term to resolve the crisis, yet he remains in charge having not fulfilled his mandate. He will address shareholders at the company’s annual meeting on Wednesday.
“The federal government, the Nigerian Communications Commission and the ministry of communications can do nothing about the MTN case until the committee concludes its thorough investigation,” Oluwadamilare said. “There’s no point dealing with a particular organization from different fronts. It would be counter-productive.”
MTN’s last reported offer was to pay $1.5 billion in a combination of staggered cash payments, sovereign debt purchases and access to its network. The company is Nigeria’s biggest mobile-phone company, and in turn the country is the largest of MTN’s 22 markets across Africa and the Middle East.
Nigeria’s economy risks falling into recession after it shrank in the first quarter as oil output slumped and the manufacturing, financial and real estate industries declined.
Source: News Express.