Contrary to speculation in some quarters that the Central Bank of Nigeria (CBN) might soften the sanctions it imposed on four banks for helping MTN Nigeria Communications Limited illegally repatriate funds, the apex bank has debited the lenders’ ac-counts with the huge fines it slammed on them for the violation, New Telegraph learnt yesterday The regulator had, last week, announced that it had fined Standard Chartered Bank N2.4 billion; Stanbic IBTC, N1.8 billion; Citibank, N1.2billion and Diamond Bank, N250 million for allegedly assisting the telecoms giant to illegally move $8.13 billion abroad. It also ordered the lenders and MTN to immediately refund the repatriated sum. Following the public announcement of the fines, the four lenders had separately issued statements, indicating that they were prepared to engage with the CBN to resolve the issue.

However, New Telegraph gathered from a reliable source at the CBN that the banking watchdog had debited the accounts of the affected lenders with the fines. This means that Standard Chartered Bank’s account has been debited N2.4 billion, Citigroup’s N1.2 billion, Stanbic IBTC’s, N1.886 billion and Diamond Bank’s, N250 million.

The CBN usually debits the account of banks when it imposes a fine or to implement aspects of its monetary policies such as Cash Reserve Requirements (CRR) if such lenders do not comply. In a letter dated September 6, to the Nigerian Stock Exchange (NSE), Stanbic IBTC, confirmed the development, informing stakeholders that the CBN had debited the full amount of the stated fine from the bank’s account with the apex bank. The letter, signed by the Group Company Secretary, Chidi Okezie, and Acting Head, Marketing and Communications, Bridget Oyefeso- Odusami, stated in part: “Following our earlier announcement to The Nigerian Stock Exchange on 30 August 2018, in respect of the penalty of N1.886 billion imposed by the Central Bank of Nigeria on our banking subsidiary – Stanbic IBTC Bank Plc in relation to the remittance of foreign exchange on the basis of certain capital importation certificates issued to MTN Nigeria Communications Limited, we write to update the NSE that the CBN has debited the account of our banking subsidiary with the CBN for the full amount of the above stated fine advised to the Bank.”

The lender further reiterated its position that it has not breached any extant laws relating to Certificates of Capital Importation (CCIs) executed on behalf of MTN, adding, it will continue to provide the CBN with documents and details to support its stance that the transactions on behalf of MTN were not illegal. When contacted, a Standard Chartered Bank official did not confirm that the bank’s account had been debited, only stressing that the lender was fully cooperating with the CBN with a view to resolving the issue as soon as possible. Similarly, Citibank said in a statement it had sent a detailed response to the CBN addressing the allegations. Also, while MTN has strongly denied any wrongdoing, the CBN has emphasised that the telecoms company must comply with the directive. In fact, a few days ago, the apex bank dismissed reports that MTN may refund $8.1 billion demand in local currency. Isaac Okorafor, CBN’s spokesperson, said MTN would not get a naira-denominated benefit to refund the $8.1 billion.

He was quoted as saying: “The report is very clear, what we have here is in dollar terms and not naira.” In a related development, citing the CBN’s CCIs allegation, coupled with the report that the Nigeria’s Attorney General (NAG) is seeking payment of $2 billion in taxes allegedly incurred over the last decade by MTN, Moody’s Investors Service has announced that it had placed the telecom firm’s ratings on review for downgrade. “MTN’s ratings have been placed on review for downgrade to reflect the uncertainty around the potential implications of the recent CBN and NAG announcements on MTN’s credit profile,” Moody’s said.

MTN, whose debt stands at around 57 billion rand ($3.7 billion), has said the CBN’s allegations are without merit and it would hold talks with authorities to defend its position. Moody’s, which already has junk rating on MTN debt at Ba1, said without the refund, demand and the potential tax shortfall MTN would be able to repay approaching debt maturities over the next 12 to 18 months. News of the unexpected tax bill had sent MTN shares tumbling by as much as 7.5 per cent to an almost 10-year low.

This is the second time MTN Nigeria would be running into troubled waters with the Nigerian government since it began operations in Nigeria 17 years ago. In October 2015, the telecoms giant was fined N1.04 trillion by the Nigerian Communications Commission (NCC) for failing to disconnect around 5.1 million subscribers from its network for not having been registered as of September 2015, as prescribed by the regulatory agency. The total sum was based on a fine of N200,000 for each unregistered subscriber. However, after prolonged negotiation with both the regulatory agency and the Federal Government, the company had the fine reduced to N330 billion.

With the resolution mid- June 2016, there was an agreement for settlement over a three-year period. As at last February, the Executive Vice Chairman of the Commission, Prof. Umar Danbatta, disclosed that MTN had paid N110 billion out of the N330 billion, meaning that the company still had N220 billion to pay to the regulator.

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