MOBILE giant MTN Nigeria will not pay the N780 billion fine imposed on it by the Nigerian Communications Commission (NCC) over subscriber identity module (SIM) card fraud. It will rather challenge the authority of the regulator in court, the company said yesterday.
The telco said it had sought legal advice and would challenge the fine and the manner of its imposition which it argued went beyond the constitutional powers of the regulator. The deadline for the payment is December 31.
But the NCC said it was yet to receive MTN’s court papers.
Its Director, Public Affairs, Tony Ojobo, wondered why the volte face after MTN had admitted committing the crime and pleading for leniency in a letter to the commission.
A statement issued by MTN Group Corporate Affairs reads: “Further to the SENS announcement issued by the company on 4 December 2015, shareholders are advised that all factors having a bearing on the matter have been thoroughly and carefully considered, including a review of the circumstances leading to the fine and the subsequent letters received from the NCC.
“MTN Nigeria acting on legal advice has resolved that the manner of the imposition of the fine and the quantum thereof is not in accordance with the NCC’s powers under the Nigerian Communications Act and therefore there are valid grounds upon which to challenge the fine.
“Accordingly MTN has followed due process and has instructed its lawyers to proceed with an action in the Federal High Court in Lagos seeking the appropriate reliefs.
“MTN is advised that in the current circumstances in line with the lis pendens rule (pending legal action) the parties are enjoined to restrain from taking further action until the matter is finally determined. This is consistent with previous judicial decisions in Nigeria.
“Notwithstanding this action, the company will continue to engage with the Nigerian authorities to try and ensure an amicable resolution in the best interests of the company, its stakeholders and the Nigerian authorities.”
The telco advised its shareholders to continue to exercise caution when dealing in the firm’s securities until a further announcement is made.
NCC imposed a fine of N1,4trillion on MTN for “criminally harbouring” some 5.2million pre-registered SIMs on its network, a situation security experts said left much to be desired, especially at a time the country was fighting the Boko Haram insurgency. The penalty for each pre-registered SIM is N200,000. All the telcos know about this and they have at one time or the other been sanctioned for selling pre-registered SIM cards to their customers.
After much pressure from the telco and intervention form the Presidency, the fine was reduced to N780billion.
“On 3 December 2015, shareholders were informed that MTN had received a formal letter dated 2 December 2015 from the NCC (the first letter) informing the company that, after considering the company’s request, it had taken the decision to reduce the fine imposed on the MTN Nigerian business from the original N1.04trillion (the original fine) to N674m, which had to be paid by 31 December 2015. The fine relates to the late disconnecting of 5.1 million MTN Nigerian subscribers in August and September 2015. This was a reduction of 35 per cent of the Original Fine.
“Late on 3 December 2015, the day after receipt of the first letter, the company received a further letter from the NCC dated 3 December 2015 (the second letter). The second letter, which was stated to supersede the first letter, informed the company that the fine had actually been reduced by 25 per cent to N780billion and not by 35 per cent to N674billion, as was stated in the first letter. The payment date remained 31 December 2015,” MTN Group explained, adding that neither the first letter nor the second letter set out any details on how the reduction was determined.
MTN said it was carefully considering both the first and second letters, adding that its Executive Chairman Phuthuma Nhleko will immediately and urgently re-engage with the
Nigerian authorities before responding formally, as it is essential for the company to follow due process to ensure the best outcome for the company, its stakeholders and the Nigerian
authorities, and accordingly all factors having a bearing on the situation will be thoroughly and carefully considered before the company arrives at a final decision.
“Shareholders are therefore advised to continue to exercise caution when dealing in the
company’s securities until a further announcement is made,” the statement from MTN Group Corporate Affairs concluded.
