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Illegal Repatriation: CBN directs MTN to refund $8bn, slams N6bn fine on four banks

 

The Central Bank of Nigeria (CBN) has ordered telecommunication giant, MTN to refund $8 billion for illegally repatriating funds,.

The apex bank also slammed heavy sanctions on four Money Deposit Banks (MDB) totaling N5.87 billion for what it described as ‘flagrant violation of extant laws of the Federal Republic of Nigeria.

The CBN’s Director of Corporate Communications, Mr. Isaac Okorafor, announced the bank’s decision on Wednesday, listing the four sanctioned banks as Standard Chartered which was fined N2.4 billion, Stanbic IBTC, N1.8 billion, Citibank, N1.2 billion and Diamond Bank N0.25 billion.

The banks’ actions, he said, contravened the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 of the Federal Republic of Nigeria and the Foreign Exchange Manual, 2006’.

Okorafor said that the actions of the CBN became necessary following allegations of remittance of foreign exchange with irregular Certificates of Capital Importation (CCIs) issued on behalf of some offshore investors of MTN Nigeria Communications Limited and subsequent investigations carried out by the apex bank in March 2018.

“The CBN has therefore asked the Managements of the banks and MTN Nigeria Communications Limited to immediately refund the sum of $8,134,312,397.63, illegally repatriated by the company to the coffers of the Central Bank of Nigeria,” Okorafor said.

 

[penci_blockquote style=”style-2″ align=”none” author=””]The CBN investigation further revealed that on account of illegal conversion of MTN shareholders’ loan to preference shares (interest free loan) of $399,594,146.00, the sum of $8,134,312,397.63 was illegally repatriated by the company.[/penci_blockquote]

The CBN Spokesman further disclosed that the decision of the Bank followed thorough investigations by it into the allegations of remittances by the four banks of forex with irregular certificates of Capital Importation (CCIs) issued on behalf of some offshore investors of MTN Nigeria Communications Limited.

According to him, the investigations revealed that the sum of $3,448,119,321.72 was repatriated by Standard Chartered Bank on the basis of the illegally issued CCIs.

Similarly, he said the sums of $2,632,005,623.78, $1,766,263,212.75 and $348,914,501.30 were repatriated by Stanbic IBTC Nigeria, Citibank Nigeria and Diamond Bank Plc, respectively during the period 2007 and 2015.

Accordingly, he said the CBN had directed the affected banks to immediately refund the respective sums to the CBN.

The CBN investigation further revealed that on account of illegal conversion of MTN shareholders’ loan to preference shares (interest free loan) of $399,594,146.00, the sum of $8,134,312,397.63 was illegally repatriated by the company.

While disclosing that the investigations by the CBN took a while in order to carry out thorough inquiry and give fair hearing to all parties involved, Mr. Okorafor advised all banks and multinational companies in Nigeria to adhere strictly to the provisions of all extant laws and regulations of Nigeria in their foreign exchange transactions.

 

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He warned that the management of banks and companies which failed to abide by the existing guidelines would be appropriately sanctioned, which sanctions may include denial of access to the Nigerian foreign exchange market.

A similar sanction had been imposed on the MTN in the past by a federal government agency for contravening the country’s extant laws.

In 2015 the multinational telecom company came under the big stick of the Nigerian Communications Commission (NCC) for failing to meet the deadline for the disconnecting the Subscribers Identification Modules SIM with improper registration.

It was discovered that MTN had failed to properly register 5.2 million SIM cards. As a result, the NCC slammed a fine of N200,000 every unregistered SIM according to the provision of the law, which amounted to $5.2 billion.

The MTN took the Federal Government and its agency, the NCC to court to quash the fine, a case the MTN eventually withdrew for an amicable out of court settlement.

Following months of back and forth on the matter, the fine was reduced from $5.2 billion to $1.7 billion which was calculated to amount N330 billion to be paid for three years until the complete payment.

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