MTN says it had suspended dividends payouts from Nigeria, where it runs the biggest wireless phone network and which generates a third of its annual sales.
The company reported a slight fall in third-quarter user numbers due to a weaker showing in South Africa, where it vies for market share with Vodacom and Cell Companies.
The telecoms company announced this in Johannesburg on Monday, as the firm faces allegations it illegally moved 14 billion dollars out of Nigeria.
MTN Group’s next chief executive will take over three months ahead of plan.
Rob Shuter, Vodafone European boss, was due to start in July 2017; however, MTN said in a statement that accompanying its quarterly updates that the new officer would now start on March 13, 2017.
South Africa-born Shuter, a banker with risk management background, will inherit a company that is the subject of a parliamentary investigation in Nigeria if it unlawfully repatriated 13.97 billion dollars between 2006 and 2016.
“MTN Nigeria continues to refute the allegations that it had improperly repatriated funds from Nigeria.
“Consequently, MTN Nigeria will strongly defend any action that would be prejudicial to its interest”, the company said in its quarterly update.
The crux of the allegation is that MTN did not obtain certificates declaring it had invested foreign currency in Nigeria within a 24-hour deadline stipulated in a 1995 law.
It, therefore, said that the repatriation of returns on those investments was illegal.
MTN this year agreed to pay a reduced fine of 1.08 billion dollars (N330 billion) to end a long running dispute over unregistered SIM cards in Nigeria.
Shares in the company have fallen by more than 14 per cent to their lowest level in more than six years since the latest issue surfaced on Sept. 27.
Meanwhile, MTN Nigeria has denied it illegally transferred $14bn from Nigeria.
The company is facing a probe from the Senate over accusations it connived with senior Nigerian officials to move the funds out of the country without complying with the law.
“We would like to reiterate that at no point did MTN Nigeria illegally repatriate funds out of Nigeria or collaborate with Nigerians to loot the external reserves of the country,” Mr Ferdinand Moolman, the Chief Executive Officer of MTN Nigeria told the Senate hearing in Abuja last Thursday.
“MTN is a Nigerian company and is proud to be conducting business in Nigeria. It therefore categorically refutes any accusations of money laundering, economic sabotage or tax evasion levied against it,” he added.
In a statement credited to Moolman and released by MTN Nigeria on Friday, it stated that, “specifically with the point of Certificates of Capital Importation (CCIs) in the matter of alleged repatriation of funds out of Nigeria, that no dividends were declared or paid until the CCIs were issued and finalised.
Moolman added that MTN Nigeria only requested for CCIs for Foreign Capital that was imported into Nigeria, and dividends were externalised on CCIs.
“Often for various reasons (such as not having all the required documentation for instance), it is not possible to issue a CCI within 24 hours, and the Central Bank of Nigeria’s Forex Manual contemplates such situations by asking that the banks refer to the CBN for approval. Besides, the requirement to issue a CCI within 24 hours of conversion is an administrative requirement. As such, the CBN has the authority, and indeed we believe, approved the banks’ applications to issue CCIs outside the recommended time frame,” concluded Moolman.
The Senate probe followed a motion last month by Senator Dino Melaye, which called for MTN to be investigated over the alleged illegal transfers. Four local banks were alleged to have been used to move the funds with the help of the trade minister. The probe is the latest setback to hit MTN in Nigeria.
The firm was last year slammed with a $3.9 billion fine for failing to cut off 5.1 million unregistered SIM cards, amid fears that some of the affected lines were being used by Boko Haram insurgents.
In June, MTN announced that following negotiations with the Nigerian authorities, it had agreed to pay $1.7 billion as a final settlement.