Why MTN’s N1.04tr fine was cut to N330b, by minister
Why MTN’s N1.04tr fine was cut to N330b, by minister
The Presidency and the Senate are heading for a showdown over the reduction of the N1.04 trillion fine imposed on MTN Nigeria first to N780 billion and thereafter to N330 billion.
MTN was fined for failing to meet the deadline fixed by the Nigerian Communication Commission (NCC) to disconnect unregistered subscribers .
The firm was fined $1,000 per each of its affected 5.2 million subscribers, totalling $5.2 billion
Minister of Communication Adebayo Shittu explained at the weekend, that the reduction was approved by the Federal Executive Council (FEC) to avoid stifling foreign investments.
But the Senate has queried the action, alleging that the process was not transparent.
It summoned the Minister of Communication, the Attorney General of the Federation, the Governor of the Central Bank of Nigeria (CBN) and the chief executive of the NCC.
Speaking at the Achiever’s Award ceremony in Ibadan, the Oyo State capital, at the weekend, where the Otun Olubadan of Ibadan, Senator Lekan Balogun, was honoured, Shittu said FEC decided to relax the penalty after realising the negative impact the burden could have on the nation, its people and the economy.
He said: “As far as we are concerned, the MTN issue is a closed matter. The Federal Executive Council has remitted substantial part of the penalty to them. Nigeria as a country must move on. We must not do anything to drive away foreign investors. Foreign investments are potent means of bringing about development and wealth creation.
“Again, we must not forget that before MTN and other telecoms operators came on board, Nigeria had only less than 500,000 telephone lines. Today, because of their involvement, Nigeria now has more than 152 million lines and MTN is the dominant operator in the field. It controls almost 50 per cent of the lines. Though they (MTN) have violated the law and we have put in the necessary penalty, we must put a halt to the limitless crisis so that we don’t discourage foreign investors. That is what the executive has done to ensure we move ahead.
“We know, for instance, that MTN operates in 22 countries. And that what they make in Nigeria alone is more than what they make in other 21 countries put together,” he said.
Shittu also advised telecoms operators against taking Nigeria and their customers for granted, warning that all infractions would be appropriately sanctioned.
“The operators owe a duty to Nigerians to continue to improve on their services. Nigerians have been paying through thick and thin to enjoy and patronise them. To whom much is given, much is expected.”
The Senate said the transactions were fraught with “suspected criminal tendencies as they were perfected secretly, particularly without recourse to due process”.
Senate Committee on Communications Chairman Gilbert Nnaji, in a letter titled “Re: Settlement between NCC and MTN over fine”, expressed dismay over how the “settlement agreement of N330 billion was reached with MTN out of a whooping N1.04 trillion”.
The letter was dated June 15, 2016 and addressed separately to stakeholders, including Minister of Justice and Attorney General of the Federation, Minister of Communications, Executive Vice Chairman/CEO of NCC, Accountant-General of the Federation, Minister of Communications, Managing Director/CEO of MTN and the Governor of the Central Bank of Nigeria.
He noted: “As a committee and representatives of the Nigerian people, we are saddened about this development at a time when the Nigerian economy needs all the available capital infusion to bolster it.
“It is our strong opinion that Nigeria has been shortchanged in this whole process on account of the ridiculous settlement payment plan, coupled with the disparity in the exchange rate regime when the fine was imposed ab initio compared with the current prevailing exchange rate when it was agreed to cut the fine to N330 billion.”
Specifically, Senator Nnaji lamented that “NCC could engage in such a negotiation that is tainted with a lot of questionable conclusions without the knowledge of the Committee”.
He added that “the Committee is worried about this development because it is on record that during our last investigative meeting with all the relevant parties to this matter on Thursday, March 10, 2016, the Committee was informed that the case was still in court and that it was adjourned till March 18.
“The Committee was not aware of the outcome of the court case, neither was it privy to any active negotiation that led to the fine being reduced to N330 billion.
“It is our concern that Nigeria has been shortchanged in this whole process on account of the ridiculous settlement payment plan, coupled with the fact that parties involved in the negotiation were either oblivious of the exchange rate value of the Naira to the Dollar when the sanction was meted originally compared to current exchange rate regime when the value of the Naira is now on the downward slide.”
“Consequently, you are hereby invited to appear before the Committee to shed more light on the issues surrounding the settlement.
“You are requested to furnish the Committee with the following information to guide it in its deliberation: Document(s) detailing Presidential Directive to “accede that MTN should pay N330 billion to the Nigerian Government” as contained in paragraph1of your letter.”
“Document (s) specifying evidence of negotiation such as the terms of negotiation.
“Parties to the negotiation; modalities for arriving at N330 billion; minutes of negotiation meeting and other relevant information.
“Relevant section(s) of the NCC Act 2003 that empowers NCC to impose fines accompanied with sections empowering the commission to reduce fines.
“Detailed reason(s) for the reduction of the fine from N1.04 trillion to N780 billion to N330 billion;
“Detailed information on the major role(s) being played by Accountant-General of the Federation in the entire negotiation and settlement process.
“A copy of the settlement agreement and evidence of participation of the Ministry(of Communications) and its major inputs at the negotiation meeting.
“Evidence of out-of-court settlement between MTN and the Federal Government.
“Then for “the Governor of CBN as the custodian of the CBN Recovery Account into which the initial N50 billion was lodged and as a principal player in the whole process” he is expected to present to the committee, the “Current position of the Recovery Account”, the memo said.
THE NATION