By Prince Osuagwu (Hi-Tech Editor)
MTN Nigeria Monday sued the Central Bank of Nigeria, CBN and the Attorney General of the Federation, AGF over allegations of improper repatriation of about $8.1billion and unpaid taxes of $2.0 billion the duo levied against it.
The telco is seeking injunction to restrain them from taking further action in respect of their orders to reclaim the alleged debts.
CBN had, last week, alleged improper dividend repatriations by MTN Nigeria and requested that $8.1 billion be returned to the coffers of the CBN. In the other hand, the AGF had also alleged that MTN did not pay taxes on foreign payments and imports of approximately $2.0 billion and subsequently requested the telco to make the payments within 14 working days.
However, MTN had categorically denied all allegations, saying it has always complied with and carried out all its taxes and financial obligations to the Nigerian government, dutifully
The telecommunications company told Vanguard that apart from the need to protect its assets and shareholder rights within the confines of the law, one of the major reasons it went to court was the ambiguity of the claims and the inconsistency in the positions of the two authorities making the claims.
MTN argues that it is confusing when CBN is pressurising it to refund $8.1billion when four commercial banks were issued fines in respect of the administration of the CCI and irregular dividend repatriation and requested to return, in aggregate, the same $8.1 billion.
It also said the two authorities were not clear on where and through whom the money should be paid, were it necessary to be paid as the CBN and AGF directives were in conflict with each other.
Corporate Relations Executive of MTN Nigeria Mr Tobe Okigbo said: “The allegations being made involve issues that appear to be complex and so are easily misunderstood and misinterpreted. They are made even more confusing when the relevant authorities send conflicting messages and instructions and act in a way that appears un-coordinated and at cross purposes.
The Attorney General while communicating us has directed that the payment of the $8.1 billion is dealt with through his office rather than as directed by the CBN.
“The simple reality is that MTN Nigeria has never repatriated dividends on the CCIs referenced by the CBN and that MTN is fully compliant with Nigerian tax law. With situations like this, it is vital for both the government, regulators and the company to have absolute clarity on the nature of both the allegations being made and the processes that are being followed. In the absence of this clarity, our only option is to seek judicial intervention and to ask the courts to act as adjudicator. This has been done today.”
“So we have applied today in the Federal High Court of Nigeria for injunctive relief restraining the CBN and the AGF from taking further action in respect of their orders, while we continue to engage with the relevant authorities on these matters.
MTN said it will continue to categorically and unequivocally deny all charges related to the CBN and AGF investigations into the company’s CCIs and unpaid taxes respectively, while it remained fully committed to Nigeria.
Last week, MTN faulted the AGF, on the $2billion tax saying his calculations that resulted into such huge figures, were wrong.
The telco revealed to the media that the Attorney General had notified it that his office made a high-level calculation and arrived at approximately $2.0 billion in taxes relating to the importation of foreign equipment and payments to foreign suppliers over the last 10 years.
The company disclosed that after the notice, the AGF allowed it the opportunity to do a self-assessment of the taxes in this regard.
Officials of the company who spoke to Vanguard, said: “MTN Nigeria in compliance to the request, submitted a comprehensive documentation to the office of the AGF in August 2018 detailing initial assessment of the full period which indicates that total payments made to the tax authorities in regard to these foreign imports and payments in aggregate are $700 million.
However, we were shocked to be later notified by the office of the AG that our documentation was not accepted and that the AGF intended to recover the $2.0bn from MTN Nigeria.
“Based on the detailed review performed, MTN Nigeria believes it has fully settled all amounts owing under the taxes in question”
Also making more clarifications on the CBN allegation, Okigbo had last week, said that “It is both regrettable and disconcerting that despite the historic engagements with the Nigerian authorities by MTN Nigeria, the senate investigation into the CCI matter, and the multiple tax assessments done by the Nigerian tax authorities over many years that were satisfactorily concluded, that these matters are being reopened.
“From the CBN’s own letter and subsequent statements, it is clear that there is no dispute that the capital captured in MTN’s books and for which CCIs were issued was imported into Nigeria, and this is acknowledged explicitly by the CBN. It is equally clear that Nigerian law provides for guaranteed unconditional transferability of funds through an Authorised dealer in freely convertible currency relating to dividends or profits attributable to the investment, payments and in respect of loan servicing where a foreign loan has been obtained.
“All dividend repatriation done by MTN Nigeria to its shareholders was done on the basis of its equity capital and all the historic dividends were declared against valid equity CCIs and in fact no preference dividends were declared and no interest in respect of these preference shares was paid. This means that it is incorrect to suggest that the conversion of a shareholder loan to preference shares has any relation to the repatriation of dividends. The two are simply not connected and we are trying to understand this position that the Central Bank has taken.” he added.
He promised that MTN Nigeria will continue to engage with the relevant authorities on all these matters and will remain resolute that it has not committed any offences and will vigorously defend its position.