A few weeks after the Central Bank of Nigeria (CBN) directed local commercial banks to refund foreign currency (forex) it says telecommunications giant MTN had banked through them, the CBN has gone ahead to debit the accounts of two banks it cited for facilitating what it termed as illegal capital repatriation from Nigeria.
The banks mentioned were Standard Chartered, Stanbic IBTC, Citibank, and Diamond Bank which were all directed to refund a total sum of $8.13 billion for breaching Nigeria’s forex rules on behalf of MTN.
#CBN Slams N2.4bn fine on Standard Chartered, N1.8bn on Stanbic IBTC, N1.2bn on Citibank, N0.25bn on Diamond Bank. All to also refund a total of $8.134bn for breaching Nigeria's forex regulations on MTN's illegal capital repatriation.— Central Bank of Nigeria (@cenbank) August 29, 2018
It was later reported that the CBN had debited N2.4 billion ($7.9 million) in fines from Standard Chartered and N1.2 billion from Citigroup. The CBN spokesman said they had investigated the remittance of forex by the banks related to irregular certificates of capital importation (CCI’s) issued to offshore investors of MTN and concluded that $3.45 billion was repatriated by Standard Chartered Bank, $2.6 billion by Stanbic IBTC, $1.7 billion by Citibank Nigeria and $348 million by Diamond Bank between 2007 and 2015.
MTN had been in talks to raise funds, possible do an IPO in Nigeria which is their largest market, like a recent one in Ghana. In various statements to shareholders on the matter, MTN said they are a law-abiding corporate citizen and that the issue of historic dividends allegedly repatriated by MTN Nigeria between 2007 and 2015 had been investigated and concluded at the Nigerian senate which found that there was no collusion to contravene forex laws.
MTN’s has since sued the CBN and Attorney General of Nigeria to restrain them from taking further action against assets of the company.
EDIT: December 24, 2018:
After discussions between the Central Bank and MTN, a settlement deal was arrived at which will see MTN pay just US$53.2 million, a tiny fraction of the $8.1 billion the Bank had sought from the group’s subsidiary in the West African country.
EDIT: Jan 10 2020: The Attorney General of Nigeria withdrew the $2 billion tax demand against MTN Nigeria.
To be updated