CBN Stops Banks from Paying MTN Dividends as Subscriber Base Hits 60m
The Central Bank of Nigeria (CBN) has placed a restriction on commercial banks from paying out MTN dividends from the telecommunications firm to its parent company, MTN Group.
The Cable reports that the CBN restriction was made known by MTN in a quarterly update sent to shareholders.
The telecommunications giant has also maintained that it was not in any way involved in any illegal repatriation of funds out of Nigeria to South Africa or any other country as alleged by the Nigerian Senate.
The Senate had some weeks ago launched a probe into an allegation raised by Senator Dino Melaye that MTN had illegally repatriated about $13.97 million out of the country.
Melaye had accused four commercial banks and the minister of trade and investment, Mr Okechukwu Enelamah of being complicit in the illegal repatriation.
On Monday, it was revealed that the CBN had ordered the four commercial banks where MTN had its corporate accounts to suspend dividend payouts from Nigeria pending the conclusion of investigations.
“MTN Nigeria, four commercial banks, certain MTN Nigeria directors and shareholders, the Central Bank of Nigeria and others appeared before the Senate on 20 October 2016 at the outset of this investigation,” the update from MTN read.
The update added, “MTN Nigeria and its bankers are cooperating with the investigation with a view to resolving the matter as expeditiously as possible.
“In the interim, the CBN has instructed the banks to suspend any remittance of dividends until further notice. MTN Nigeria continues to refute the allegations that MTN Nigeria had improperly repatriated funds from Nigeria.
“Consequently, MTN Nigeria will strongly defend any action that would be prejudicial to its interest. MTN Nigeria has no intention to make any dividend payments over the next six months.”
It is yet unclear if the MTN dividends referred to are limited to the payments made by MTN Nigeria to its parent company or also extends to dividends paid on shares held by investors in South Africa.
In the past, following the imposition of a hefty fine by the Nigerian Communications Commission (NCC) on MTN Nigeria, the group company’s share price tumbled.
Meanwhile, MTN Nigeria has reported a 2.5% increase in its subscriber base to 60.5 million. It attributed the increase to effective reconnection strategies.