The share price of MTN Group Limited extended gains after Nigerian lawmakers ruled that allegations of illegal repatriation of almost $14bn were unfounded and the wireless company had not violated the law.
There were no “proofs of collusion to contravene the foreign exchange laws,” a Senate investigative committee said in its report released on Wednesday in Abuja. “There was evidence of massive capital outflow but that alone is not conclusive that a crime has been committed,” Bloomberg quoted the report as saying.
The shares rose as much as 0.5 per cent in Johannesburg, following a 2.3 per cent gain late Wednesday when the ruling was first reported. That values Africa’s biggest mobile-phone company by sales at 242 billion rand ($17bn).
Nigeria’s decision to drop the case indicates that relations between the government and the country’s mobile market company are on the mend following the settlement of a $1bn fine last year. MTN has agreed to list its local unit on the stock exchange in Lagos, and Chief Executive Officer Rob Shuter said last week the IPO was on track to conclude in about six months.
The penalty levied by the Nigerian Communications Commission was for missing a deadline to disconnect about five million subscribers in a security crackdown.
The legislators asked the Central Bank of Nigeria to take measures against Stanbic IBTC Nigeria Plc “for improper documentations” regarding capital repatriation and loan repayments, adding that steps should be taken to enforce foreign-exchange laws to deal with known deficiencies.
Dino Melaye, a senator, more than a year ago accused MTN of illegally repatriating $13.92bn over a decade starting in 2006, triggering the investigation.
MTN spokesman, Chris Maroleng, confirmed the case has been dropped. Stanbic IBTC is aware of the Senate’s statement and is “awaiting formal communication from the relevant committee,” the lender said in an emailed response.
Nigeria is MTN’s biggest market, with more than 50 million customers. The shares traded 0.3 per cent higher at 128.21 rand as of 9:31am in Johannesburg.