MTN has just announced it’s made a payment of $250 million (N50 billion) to the Nigerian government, towards the fine imposed on it, late last year.
The Nigerian Communications Commission hit MTN with a $5.2 billion fine, because they failed to deactivate 5.1 million unregistered SIM cards before the August 11th deadline. The penalty was calculated using a rate of N200,000 per unregistered SIM.
$5.2 billion is a big chunk of their annual revenue, so they spent eons negotiating, and renegotiating it. Eventually, the fine was said to be reduced by 35%, to $3.4 billion, which was later corrected to $3.9 billion (25%). By this time, MTN’s stock had taken a huge hit, and in December, they decided to take legal action against the NCC.
As you can expect, as soon as the announcement of the payment and the withdrawal of the lawsuit was made earlier today, MTN’s share price took flight. Investors must be happy the future of the company’s Nigerian subsidiary (which happens to be its largest) isn’t in limbo anymore.
While it’s not the full sum, and while it’s way past the payment deadline, they have said that the payment is a “gesture of good faith and commitment to continued efforts towards an amicable resolution”. We’ll find out what comes of it, soon enough.
