MTN shares begin recovery as Nigeria’s central bank mellows

The shares of MTN Group Limited achieved its biggest gain since March on Thursday as the Central Bank of Nigeria (CBN) said, Wednesday, that it was in talks with the South African company and the bankers of its Nigerian unit to resolve issues surrounding claims that the telecoms company illegally moved $8.1 billion out of the country.

“In response to the recent regulatory actions, the Banks and MTN are engaging the CBN and have provided additional information which is currently being reviewed with a view to arriving at an equitable resolution,” the CBN said in statement signed by its Director of Corporate Communications Isaac Okoroafor.

The shares of MTN listed on the Johannesburg Stock Exchange grew 7.5 percent to R78.87 on Thursday morning as its tries to recover from a dip in value occasioned by the CBN claim. Four banks were fined $15.6 million as a result of the alleged illegal capital repatriation. The company has also faced a claim by the attorney general’s office that it owed $2 billion in back taxes.

MTN had in different fora maintained that the company did nothing wrong on both claims and had asked the court to prevent the central bank and the attorney general’s office from taking any actions against the company.

As claims against MTN and similar actions by Nigerian regulators against foreign companies increase, more investors became wary of doing business in Nigeria. Hence, the CBN moved to reassure investors that it was committed to welcoming foreign investments and investors.

“The recent sanctions on the banks arose due to irregularities with respect to repatriations made on behalf of MTN Nigeria Limited and were not in any way designed to restrict access to investor returns,” the central bank explained.