Editor’s Note: This post’s headline originally read “MTN Nigeria denied access to funds in Nigerian Banks”. It has been updated to reflect recent developments.
Yesterday Tuesday, the Federal High Court in Lagos prohibited MTN Nigeria from moving funds it has in Nigerian Banks abroad, according to Sahara Reporters. The prohibition extends until after the hearing of MTN’s suit challenging the N1.4 trillion fine imposed on it by the Nigerian Communications Commission (NCC).
Consequently, the Federal Government brought a motion to restrain the 21 banks, in which MTN Nigeria has money, from releasing funds to the company.
The NCC imposed the fine on MTN as penalty for failing to disconnect 5.1 million unregistered subscribers. There was an initial November 16 deadline for payment of the fine which was later extended to December 31.
Following a seemingly good-willed 25% reduction of the fine, MTN Nigeria proceeded with a law suit, on grounds that imposition of the fine was not in accordance with the NCC’s powers under the Nigerian Communications. In response, the Federal Government made it clear that with or without the law suit, the deadline for payment of the fine stood.
Apparently, MTN has yet to meet the deadline, hence the restriction on access to funds in Nigerian Banks.
According to a report by the ThisDay Newspapers, Justice Idris Mohammed of the Federal High Court in Lagos actually turned down the application from the Federal Government seeking to freeze the accounts of MTN Nigeria Communications Limited in Nigeria.
The Attorney General of the Federation (AGF) and Minister of Justice, Abubakar Malami (SAN), who filed the application yesterday, cited fears that MTN could move all of its funds out of the shores of Nigeria before the fine is paid up.
However, as ThisDay reports, the Justice Mohammed turned down the application, stating that the AGF had not shown enough facts to prove that MTN was about to empty its bank accounts and move its funds out of the country.
To back up claims, instances were provided when MTN Nigeria moved over $936 million to offshore accounts in Mauritius, Cayman Island and the British Virgin Islands.It was also revealed that MTN Nigeria moved $7.7 billion made in Nigeria to a foreign account between October 2007 and May 2009.
But regardless of all these, Justice Mohammed turned down the application, stating that the AGF did not have enough evidence to back up its claims that MTN Nigeria was going to move monies out of the shores of Nigeria.
Mohammed, who noted that the case was sensitive and he would rather urgently hear the case filed by MTN Nigeria to challenge the fine and give a judgment within a short time. An he also gave an order for the parties to maintain status quo antebellum pending the determination of the suit and adjourned the case to January 22, 2016 for hearing.
Nigerian startups raised $17.6m in Q1 2019, 8.5% higher than they did in Q1 2018. Find out more in the latest quarterly edition of the Nigerian Startup Funding Report here.