Nigeria is very important to MTN. The South African company makes the largest percentage of its revenue from the country but it also faces its largest fine ever in the continent’s largest economy. The Nigerian Communications Commission (NCC) had slapped a $5.2 billion fine on the telecommunications company for failing to disconnect 5.2 million unregistered SIM cards before the August 2015 deadline.
The NCC had reduced the fine to $3.9 billion but it did not stop MTN from challenging the fine in court. The telco had maintained that it went to court as a last resort but it would continue to seek an amicable end to the issue.
Nigeria’s telecoms minister Adebayo Shittu had last month advised MTN to withdraw its lawsuit. “If they withdraw it creates a better environment, an environment where there is no stress or pressure on either side.” With negotiations so far not yielding the desired fruits, MTN has taken a big step, hiring former Barrack Obama administration attorney general Eric Holder. The former U.S. attorney general is known for negotiating lower fines for corporate offenses, while in public offices and has continued this as partner at the international defense firm Covington & Burling.
The Associated Press quoted NCC spokesman Tony Ojobo to have said on Thursday that Holder “is leading MTN’s legal team” challenging the fine.
A Federal High Court in Lagos, at the last seating in January, adjourned MTN’s suit till March 18, following a request by the telco for more time to pursue an out of court settlement. MTN will be banking Holder to get this done before the next court sitting.
As U.S. attorney general, the African-American brokered several deferred prosecution agreements, which are intended to give defendants a chance to clean up their act and rehabilitate. Usually, if such companies comply (and pay fines), the charges are dropped. In this case, there are no charges against MTN, but there is a fine which is more than the telecoms company’s profit in Nigeria in 2015. Like several out-of-court settlements he has brokered, Holder is expected to help MTN end uncertainties surrounding its business in Nigeria and the issue of the fine will be settled.