‘CBN’s $8.1bn refund order threatens MTN’s NSE listing’ say experts

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A worker walks past an outlet of South Africa's MTN Group in Johannesburg, South Africa, February 23, 2016. REUTERS/Siphiwe Sibeko/File Photo

Experts have said the request by the Central Bank of Nigeria (CBN) that the MTN Group should refund 8.1 billion dollars illegally repatriated from Nigeria will jeopardise the listing of its shares on the Nigerian Stock Exchange (NSE).

The CBN ordered MTN to refund $8.1 billion illegal capital repatriation from its Nigerian operations to offshore investors. Four banks were fined N5.87b.

The MTN Group rejected the accusation.

The Securities and Exchange Commission (SEC) said it had not received any application from the MTN Group regarding its proposed initial public offering (IPO).

The MTN has the largest share of Nigerian telecome market with 36.39 per cent.  Airtel has 26.10 per cent as at February, Globacom (26.03 per cent) and 9mobile (11.49 per cent)

Progressive Shareholders Association of Nigeria (PSAN) Chief Boniface Okezie advised CBN and MTN Group to resolve the issue.

He said he expected a resolution on the matter to avoid a systemic banking crisis, given that the repayment of 8.1 billion dollars, which is about half of MTN’s market capitalisation, could threaten its Nigerian bankers.

“Talking about the CBN allegation that MTN repatriated 8.1 billion dollars out of the country. It is an issue that can be resolved by the two parties because there is no way such huge amount of money could have been transferred by the commercial banks without the knowledge and approval of CBN in the first place.

“Let MTN and the affected banks engage with the relevant authorities and face CBN to vigorously defend their position on this matter,” Okezie said.

Okezie blamed the delay in the listing of MTN shares and those of other foreign companies on NSE on lack of a regulating law in the Nigerian financial market.

He said the growth of the Nigerian capital market was tied to the effectiveness of its regulatory framework.

National Coordinator, Independent Shareholders Association of Nigeria (ISAN) Mr Sunny Nwosu, urged the MTN Group to be more proactive with its proposed listing plans.

Nwosu said the more MTN delays the offer, the more the market players and the public believe there was crisis.

According to him, postponing the offer is not the best option because it damages investors’ confidence and jeopardises the telecom company’s proposed public offer in Africa’s largest economy.

“The denial of an IPO application by MTN to SEC signifies doubt over the extent of preparation on the part of MTN to be listed on the NSE this year.

“MTN has been foot-dragging on the move for listing. But the earlier it steps forward with the listing offer, the better for the Telecom industry and the Nigerian economy,” Nwosu said.

There were reports earlier in the year that the MTN Group was perfecting plans to raise about 500 million dollars from the sale of shares in its Nigerian business in the first half of 2018.

Standard Bank Group Ltd. and Citigroup Inc. have been advising the company on the disposal of as much as 30 per cent of the Lagos-based unit on the NSE.