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N1.04trn fine: FG reduces MTN fine, agrees staggered payment option

*MTN to pay N330bn, lists on NSE as price for final settlement
*House of Reps kicks, insists on full payment

By Prince Osuagwu (Hi-Tech Editor), Johnbosco Agbakwuru & Emmannuel Elebeke

AFTER eight months of going back and forth, telecom operator, MTN, has finally settled issues with the Nigerian government as the Nigerian Communications Commission, NCC yesterday reduced the N1.04 trillion fine on the operator to N330 billion.


The operator was also allowed to pay the money in a staggered payment plan that will last till May 31, 2019.

The fine was imposed last October over alleged inability of the operator to disconnect about 5.1 million improperly registered users on its network.

Besides the payment the operator is expected to have its shares listed in the Nigerian Stock Exchange, NSE and as well tender an apology to the Government of Nigeria and Nigerians within one month of the execution of the Agreement.

These were the terms in which the federal government of Nigeria said it could consider the matter finally resolved.

Vanguard gathered authoritatively that the N330bn includes the “goodwill” payment of N50Billion earlier made by MTN to the government.

The balance of N280Billion will be made in six tranches in staggered arrangement which will last May, 31 2019.

By the terms of agreement, MTN will pay N30Billion into NCC’s Treasury Single Account (TSA) with the Central Bank of Nigeria (CBN) 30 days from the date of the agreement dated June 10, 2016, (yesterday) and on March 31, 2017, It will pay N30Billion; In March 31, 2018 it is also to pay another N55Billion and on December 31, 2018 it will pay N55Billion.

Subsequently, March 31, 2019 it will pay N55Billion and the balance of N55 bn will be paid May 31, 2019

The agreement and resolutions were signed yesterday by the Executive Vice Chairman (EVC) of NCC, Prof. Umar G. Danbatta, NCC Commission Secretary, Mr. Felix Adeoye, Chief Executive of MTN, Fredinand (Fredi) Moolman and MTN’s Company Secretary, Mrs. Uto Ukpanah, and witnessed by Mr. Tony Ojobo, NCC, Director, Public Affairs; Mr. Usman Malah, Chief of Staff to the EVC, NCC; Ms Helen Obi, Assistant Director, Legal, NCC and Ms. Amina Oyagbola, Corporate Executive, MTN..

House of Reps kick
Meanwhile, Chairman of House of Representatives Committee on Telecommunications, Saheed Fijabi yesterday also kicked out at the arrangement, telling journalists in Abuja that it was ludicrous that even when the House Committee investigating the alleged MTN offence had not concluded investigations, some powerful forces had colluded with the operator to make mess of the fine.

He disclosed that the Minister of Communications, Adebayo Shittu and the Executive Vice Chairman of NCC, Prof. Umar Garba Danbatta have been invited to appear on Monday to explain the reason for recent development.

According to Fijabi, the said N330Bn was the amount MTN had long offered to pay but was rebuffed by NCC. Why the regulator would turn around to accept is a wonder.
Fijabi noted that going by the NCC Act, instead of reducing the fine of N1.04 trillion, increment was more appropriate considering the enormity and consequences of the company’s negligence that led to the fine.

He recalled that NCC had in a letter to the Attorney General of the Federation AGF, and Minister of Justice, Abubakar Malami on the proposal of MTN’s N330Bn, said that the amount was a far cry, but expressed shock at the sudden change of mind.

“In a letter dated March 1, 2016, NCC said: “The proposal to pay the sum of N300 billion as against the fine of N1.04 trillion (and subsequently reduced to N700 billion by the Federal Government of Nigeria, FGN) is not supported by any verifiable justification, I wonder why the sudden change of mind” he submitted. Recall that the matter which the NCC admitted has cast a shadow in the Nigerian telecom development, has seen to a 25 percent reduction of the fine, series of litigations and subsequent withdrawal of law suits, all in a bid to seek a resolution that never came.

However, in this latest settlement agreement, MTN admitted that in addition to the monetary settlement, it was required to: “subscribe to the voluntary observance of the Code of Corporate Governance for the Telecommunications Industry and will ensure compulsory compliance”.

The company also undertakes “to take immediate steps to ensure listing of its shares on the Nigerian Stock Exchange as soon as is commercially and legally possible and always ensure full compliance of its license terms and conditions as issued by the NCC”.

MTN Nigeria CEO, Ferdi Moolman who expressed much happiness at the final settlement of the rift, said, “MTN Nigeria once again offers its most sincere apologies for the series of unfortunate events that led to the imposition of the fine” He added that “It was of critical importance to reach a solution that would be of universal benefit to all stakeholders given the importance of the ICT industry in Nigeria and its tremendous impact on socio-economic growth. Along with the authorities, we believe that has been achieved.”

Promising to abide by the terms of the agreement, Moolman said that already “MTN Nigeria is undoubtedly one of Nigeria’s success stories. Broader public participation exemplifies this.” A flash back to the incident will show that the initial fine of N1.04 Trillion was later adjusted by 25% to N780 Million. MTN Nigeria considered the fine inimical to the sustainability of its business and sought judicial determination in December 2015 arguing that the move was to protect the extensive local ecosystem, valued and supported by Its business.

However, in February 2016, the company announced the withdrawal of its case against NCC and made an initial payment of N50 Billion, termed to be in “goodwill”, in order to create a conducive atmosphere for further negotiations.

At the time, Moolman had also said: “This is another manifestation of good faith and intent by MTN Nigeria. We have the equally good intentions of the Nigerian authorities and the strength of our mutual commitment to an amicable resolution. The high priority that the Government is giving to the sustainability of the industry assures us of a truly integrated approach amongst all parties, to the growth of ICT as a critical enabler of socio economic development in Nigeria.”

Commenting on the final resolution of the NCC fine, MTN Group Executive Chairman Phutuma Nhleko expressed his thanks to the Federal Government of Nigeria for the spirit in which the matter was resolved saying ‘ this is the best outcome for the company, it’s stakeholders, the Federal Government and the Nigerian people and the relationship between MTN, the Federal Government and the NCC has been restored and strengthened.”


Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.