CBN FINE: MTN’s Shares Jump 8% After Nigeria Settlement
Stock investments like good news.
On hearing that MTN is off the hook from Nigerian regulators, investors hurried to take more shares of the telecom operator at the Johannesburg Stock Exchange.
Reuters reports that in its first trading session on Thursday, since it agreed to pay $53 million to settle a row with Nigeria’s central bank that had threatened to cost it billions, its shares rose 8%.
The Central Bank of Nigeria, CBN had been demanding $8.1 billion from Africa’s biggest telecoms company, which it said the firm had illegally repatriated.
Its case centred on allegations that dividends paid by MTN between 2007 and 2015 were based on improperly issued certificates.
But after the firm provided additional documentation, the bank concluded that only one 2008 private placement was irregular.
“MTN Nigeria will pay the notional reversal amount ($52.6 million) without admission of liability,” MTN had said in a statement on Monday.
The central bank’s initial order threatened to wipe out more than half of MTN’s market capitalisation at the time it was issued in August, and spooked investors just as the company was trying to reassure them of its frontier market-focused strategy after a series of costly legal problems.
But it is not entirely over for MTN in Nigeria, as it still has to fight a $2 billion tax bill from Nigeria’s attorney general.
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