Nigeria's central bank files counter claim in escalating MTN dispute
* Nigeria cenbank asks court to dismiss MTN's case
* Seeks 15 pct interest on $8.1 bln transfer from MTN
* Cenbank says still hopeful amicable resolution will be
* MTN shares have lost $2.4 bln since claim
(Updates further with court papers)
By Chijioke Ohuocha
ABUJA, Oct 5 (Reuters) - MTN's dispute with
Nigeria's central bank looked set to drag on, after court
documents showed the bank was persisting with its demand that
the South African telecoms firm repatriates $8.1 billion.
Nigeria's central bank filed a counter claim to a court
request by MTN which sought to stop the bank from
forcing it to bring back the money, the company's lawyer said on
In asking a Lagos court to throw out MTN's case, the central
bank also requested the firm pay 15 percent annual interest on
the $8.1 billion, according to court documents seen by Reuters.
The move escalates a dispute between MTN and the monetary
authority in a market which accounts for a third of its annual
The Central Bank of Nigeria (CBN) on Aug. 29 ordered MTN and
its lenders to bring back to the country the funds which it
alleged the company had sent abroad in breach of foreign
"The improper depletion of our foreign reserves is a more
serious problem for the entire country far above the claims of
the Plaintiff (MTN) in its application," the central bank's
lawyers argued in the document.
Nigeria has been battling to defend its currency
and also shore up its reserves of around $44 billion, hobbled by
lower oil prices.
"MTN had gone to court, sued the central bank and the
attorney general. The central bank has filed a response and a
counter claim, meaning that nobody can resort to self-help in
the matter any longer," MTN's lawyer, Wole Olanipekun, told
"With this development everybody has now surrendered ... the
grievances to the court. Everybody has to wait for the decision
of the court."
MTN's next move will be to file a reply to the bank's claim,
CBN's spokesman Isaac Okorafor said the central bank "is
aggressively engaging MTN and the banks, but he added "I'm
hopeful that an amicable resolution will soon be achieved".
Shares in MTN were trading 4 percent down by 1250 GMT,
having earlier fallen as much as 8.5 percent to 79.85 rand,
their lowest level since Sept. 21. They were the worst performer
in the Johannesburg stock exchange's top 40 index.
"The market is seeing that (the central bank's move) as
going back to that aggressive stance they had right at the
beginning," said Greg Davies, equities trader at Cratos Capital.
MTN has lost 35.3 billion rand ($2.40 bln), or 17.4 percent,
of its market value since the claim was announced.
The telecoms firm is also facing a $2 billion tax bill from
Nigeria's attorney general, the demand for which MTN has also
asked the court to halt to protect its assets in the country.
Olanipekun said MTN has received no response from the attorney
Central Bank Governor Godwin Emefiele has said MTN is
"systemically important" to Nigeria, the company's biggest
market, adding that the firm and its lenders have written to the
bank and provided documents supporting that view.
MTN's most recent troubles come about two years after it
agreed to pay more than $1 billion to settle a dispute over SIM
cards in Nigeria - a country whose finances have been hit by a
weak economy and volatile global oil prices.
The latest alleged infraction, related to the fund transfer,
was that the telecoms firm did not obtain final approval before
moving the naira equivalent of $8.1 billion from its profits out
of Nigeria, the central bank has said.
MTN's lenders; Standard Chartered, Stanbic IBTC
Bank, Citibank and Diamond Bank
were also fined in connection to the money transfer.
The central bank's lawyer said in the court documents that
the $8.1 billion MTN transferred out of Nigeria was purchased
improperly from the bank and that the amount forms a large
portion of the country's total foreign reserves.
Nigeria's reserves have come under pressure this year as
foreign investors exit the country in response to rising
interest rates in the United States.
($1 = 14.7507 rand)
(Additional reporting by Tiisetso Motsoeneng and Tanisha
Heiberg in Johannesburg and Alexis Akwagyiram in Lagos
Editing by Emelia Sithole-Matarise and Elaine Hardcastle)
First Published: 2018-10-05 15:22:14
Updated 2018-10-05 19:26:45
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