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MTN heads to court over $3.9bn fine

By on December 19, 2015

MTN Group Ltd. will challenge a $3.9 billion fine in court after resolving that the penalty that’s wiped 28 per cent off the company’s value wasn’t within the powers of the Nigerian Communications Commission (NCC), the telecoms regulator, to impose.
Africa’s biggest phone company will also continue to engage with the Nigerian authorities to try and ensure an amicable resolution, the Johannesburg-based wireless operator said in a statement yesterday. Pending the court hearing, neither party should take further action until the matter is resolved, the company said, reported Bloomberg.
“There are valid grounds upon which to challenge the fine,” MTN said. “Accordingly MTN has followed due process and has instructed its lawyers to proceed with an action at the Federal High Court in Lagos seeking the appropriate reliefs.”’
The NCC imposed the penalty on MTN for failing to meet a deadline to disconnect 5.2 million unregistered subscribers as security agencies seek to fight crime in a country with poor identity records.
Chairman Phuthuma Nhleko has been leading negotiations with the NCC after former Chief Executive Officer Sifiso Dabengwa resigned.
The initial fine of $5.2 billion was reduced by 25 per cent to $3.9 billion earlier this month, with a payment deadline set for December 31.
NCC spokesman Tony Ojobo declined to comment on MTN’s plan to challenge the fine.
MTN shares gained 6.3 per cent to 138.20 rand at the close in Johannesburg, the highest since December 3. That values the company at 255 billion rand ($16.8 billion).

 

[ThisDay]