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Wednesday, September 12, 2018

Cellphone Network operator accuses Nigeria’s attorney-general of exceeding his powers- MTN

Nigeria’s attorney-general exceeded his powers in demanding $2bn in taxes and charges from MTN Group, the company said in papers filed with Nigeria’s high court and reviewed by Reuters.


The papers, filed on Monday in a move by the Nigerian arm of the South African firm aimed
at protecting its assets, also showed MTN was seeking 3-billion naira ($10m) from the West African country in court and legal expenses.

In September, the Nigerian government handed MTN a $2bn tax bill days after the central bank, in a separate move, ordered the company’s Lagos unit to hand over $8.1bn that it said was illegally sent abroad.

Nigeria, which accounts for a third of MTN’s annual core profit, is MTN’s biggest market. Some analysts see politics as a factor in the pressure on MTN as Nigerian President Muhammadu Buhari, who took office in 2015 on promises to push through tougher regulation, is seeking re-election in 2019.

"The attorney-general of the federation [of Nigeria] acted illegally, unconstitutionally, and in excess of his powers" by implementing charges in a "self-assessment exercise" that related to customs, the inland revenue and import duties, the court documents state.

The attorney-general did not respond to telephone calls and a text message requesting comment. His spokesperson, Salihu Isah, declined to comment.
The documents seen by Reuters include a writ of summons, dated September 10, ordering the attorney-general or his representative to make an appearance at the high court in Lagos within 30 days.

It was not clear whether the attorney-general had filed a statement of defence.
The attorney-general has previously said MTN Nigeria should have paid approximately $2bn in taxes relating to imports of foreign equipment and payments to foreign suppliers.
The documents submitted by MTN, about 70 pages of which were seen by Reuters in which the attorney-general is referred to as AGF and MTN Nigeria as MTNN, also refer to the allegation that MTN illegally sent $8.1bn abroad.

The central bank said in a statement issued on August 29 that the $8.1bn was "illegally repatriated" through the "illegal conversion of MTN shareholders’ loan to preference shares".

As a result, $8.1bn in dividends paid by MTN Nigeria to its shareholders between 2007 and 2015 should be returned.
MTN has denied the allegations.

It is not the first time the telecoms firm has been accused of infractions in its largest market.

Its latest troubles come about two years after it agreed to pay more than $1bn to settle a dispute over unregistered SIM cards in Nigeria, whose finances have been hit by a weak economy and volatile global oil prices.
On Monday, MTN CEO Rob Shuter told reporters in South Africa that he was confident that the dispute would be resolved.

Reuters

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