LAGOS/JOHANNESBURG (Reuters) – MTN Group, Africa’s biggest mobile operator, will keep engaging with Nigerian authorities to resolve a $10.1 billion dispute with the west African country, but is putting its faith in the courts to protect itself, its CEO said on Monday.
The telecom firm, which makes about a third of its annual core profit in Nigeria, has said the allegations are without merit, but added that no further negative steps have been taken by authorities in Nigeria.
Nigeria’s central bank on Aug. 29 ordered the South African firm and its lenders to bring $8.1 billion back into Nigeria that it alleges the company sent abroad in breach of foreign exchange regulations. MTN also faces a $2 billion tax demand from the country’s attorney general.
MTN has denied any wrongdoing, and filed a court case against the central bank.
“We have continued engagement with authorities, exchanging documentation and there is genuine will to reach an amicable situation,” MTN’s Chief Executive Officer Rob Shuter said on a conference call.
“However, we need to protect ourselves and we are relying on the courts in Nigeria to make sure there’s an amicable resolution.”
A court hearing between the central bank and MTN on the $8.1 billion repatriation case is scheduled for Tuesday.
Shuter said investors should note that the company did not expect a resolution to come through then.
“No further negative steps have been taken by the authorities in Nigeria, however it is important to keep legal steps going,” Shuter said, adding that MTN was not carrying out any repatriations from Nigeria for now.
“Tomorrow (Tuesday) we are likely to have an adjourned date because more information will likely be requested, however, it is important to create an environment to look for continued solutions.”
Shuter said although it had been a difficult quarter due to the regulatory challenges in Nigeria, the company still managed to put in a strong performance in Africa’s biggest economy with data revenue growing.
MTN said its debut stock market listing in Nigeria may slip into early 2019 because it needs to work on the format for the share sale.
It reported a 1.1 percent rise in quarterly user base, helped partly by strong performances in Nigeria.
The company said its user base increased by 2.5 million subscribers to 225.4 million users in the quarter ended September, and mobile money customers grew by 1.7 million to 25.8 million users.
Mobile money customers charge their phones with cash, and send it to friends or family via the short message service. These counterparties can then make similar transfers or cash in their credits with pre-approved agents, such as merchants or banks.
Reporting by Didi Akinyelure and Chijioke Ohuocha in Lagos and Tiisetso Motsoeneng in Johannesburg; Writing by James Macharia; Editing by Emelia Sithole-Matarise