- Court refuses freezing telecom firm’s accounts
POWERFUL forces with major stakes in giant communications company, MTN Nigeria, have reported resolved not to comply with payment of the N1.4trillion fine imposed on it by the Nigerian Communications Commission, NCC over breach of its operation guidelines.
NCC had sanctioned MTN for refusing to remove over 5.1 million unregistered telephone subscribers from its network and imposed the N1.04 trillion on the operator but later reduced it by 25 per cent after the intervention of President Muhammadu Buhari, amid pressure and negotiations from the company’s parent body in South Africa.
A highly impeccable source however told Nigerian Pilot at the weekend that MTN has decided to flex muscles over the fine and opted for protracted legal battle, ostensibly to buy time, because of the interest of the top government functionaries who are major share holders in the telecommunications giant.
South African Vice President, Cyril Ramaphosa, a former chairman of MTN was among major investors whose diplomatic engagements with the Nigerian government shifted the NCC’s ground from the initial fine to the present N780billion.
The source added that, besides a serving politician in the All Progressives Congress, APC government, a former president with equally huge investment in MTN is seeking a political solution to the fine umbrage, saying the company is not sincere in its dealings with the NCC in regard to the payment of the fine.
He explained that the failure of MTN to honour the December 31 deadline even when the Federal Government reduced the fine as well as the deadline for payment is a clear evidence of the telecommunications company’s tactics to buy time and evade compliance to the fine agreement, as it now prefers to challenge the decision in court.
The source further pointed to MTN’s acquisition of VISA FONE at the heat of the crisis a few days ago as clear indication that it is ready to call the bluff of the Federal Government sanctions.
The federal government has insisted nonetheless that it would neither be cowed nor threatened by MTN’s court action against the N1.4trillion, maintaining that the telecommunications company risks another fine if it fails to pay on deadline.
Minister of Communications, Mr Adebayo Shittu, made the statement recently in reaction to the suit instituted by the telecom operator at a Lagos High Court.
The minister, who spoke through his Special Assistant on Media, Mr. Victor Oluwadamilare, however, admitted that MTN had the right to seek court’s interpretation if it feels unsatisfied with the action of the regulator but made it clear that nothing would stop the government from imposing additional fine on the operator, at the expiration of the deadline.
According to the minister, “it is the right of MTN to approach the court but there was an infraction, which MTN admitted to have committed before it pleaded for leniency that led to the reduction of the fine from N1.4 trillion to N780 billion and the subsequent December 31, 2015 deadline to pay.
“If it has decided to go to court, it is still within the ambit of the law. I will not intervene, since they have gone to court, we will allow the court to decide if it is right for MTN to commit those infractions and breach the laws of the land.”
He, however, said that “it is unwise for MTN to go to court after the Federal Government had magnanimously reduced the fine. It will surely be fined for violating the rule at the expiration of the deadline, should it fail to pay the initial fine.
Meanwhile, MTN also insisted that its action was induced by commitment and belief in the long term sustainability of its business.
According to the company’s Human Resources & Corporate Services Executive, Amina Oyagbola, “the N780 billion fine has potentially dire consequences for the company, its employees, partners, stakeholders as well as the entire Nigeria telecommunications industry.
Being a significant contributor in Nigeria, MTN has an obligation to protect the interests of its ecosystem of millions of Nigerians who are directly and indirectly affected by its business operations and continuity.
According to Oyagbola, “the decision to seek judicial determination was reached after careful consideration of all factors, including extensive attempts at a sustainable resolution. It is important to state that seeking judicial determination was a last resort. We hold the Nigerian Government, its national objectives, laws and regulations in the highest regard.”
She, however, added that notwithstanding the action, the company will continue to engage with the Nigerian authorities in an effort to reach an amicable resolution in the interest of all stakeholders.
The NCC sanctioned MTN for refusing to remove over 5.1 million unregistered telephone subscribers from its network.
The NCC had reviewed the payment deadline from November 16 to December 31, 2015. Ahead of that date, the MTN Group had said in a statement from Johannesburg, South Africa, that it was taking legal action over the matter and subsequently filed the suit lining up about six Senior Advocates of Nigeria, SANs.
According to the firm, since its previous advice to its shareholders on December 4, 2015 that all factors relating to the sanctions were thoroughly and carefully considered, including a review of the circumstances that led to the fine and subsequent reduction by NCC, there were enough grounds upon which to challenge the fine in court.
Claiming to act on legal advice, MTN queried the manner the fine was imposed, describing it as “not in accordance with the NCC’s authorities and powers.
Court refuses freezing communication firm’s accounts
A Lagos Federal High Court, Tuesday turned down an application of Mareva injunction seeking to bar MTN Nigeria Communications Limited from emptying its accounts in 21 commercial banks in Nigeria. Mareva injunction connotes that the defendant is restrained from disposing of his assets in the sense that to do so will constitute contempt of court. However, the injunction does not affect the defendant’s power to dispose of his assets.
The application had been filed to prevent MTN from boycotting the payment of the N1.04trillion fine imposed on it by the Nigerian Communications Commission for its failure to deactivate its unregistered subscribers.
The Attorney General of the Federation and Minister of Justice, Abubakar Malami, SAN, who filed the application on Tuesday, had expressed the fear that MTN could move all its funds out of the country before the N1.04trillion fine could be enforced.
He had sought an order directing all the 21 banks to open a special interest-yielding account in the name of the Chief Registrar of the Federal High Court and move N1.04trillion out of whatever funds that was standing to MTN’s credit in their possession.
The counsel for the AGF, Mr. Dipo Okpeseyi, SAN, in a 14-paragraph affidavit deposed to by his junior, Steve Nwabueze, had argued that MTN was in the habit of regularly repatriating its funds out of Nigeria.
He noted that between October 2007 and May 2009, a period of 19 months, MTN moved over $7.7billion of the money made in Nigeria to a foreign account and further pointed the court’s attention to an instance when in one day, specifically on February 8, 2008, MTN transferred over $936million out of Nigeria to accounts in Mauritius, Cayman Island and British Virgin Island.
“Unless this honourable court urgently entertains this application, the plaintiff/respondent would move its funds out of Nigeria, being the jurisdiction of this honourable court, and thereby frustrate the enforcement of the fine in the likely event that this honourable court sanctions the imposition of the fine,” the AGF’s counsel added.
Okpeseyi maintained that MTN was under an obligation to pay the N1.04trillion fine, because it was NCC’s administrative decision, which remained final unless it was reviewed by the commission or nullified by the court.
He said though NCC had earlier given MTN a concession on the fine and reduced it to N780billion, but since MTN had neglected or failed to pay on or before December 31, 2015, the fine remained N1.04trillion.
He alleged that instead of taking advantage of the concession MTN resorted to filing a suit in order to buy time, with the hope that it could move all its funds out of Nigeria before the case would be decided.
Okpseyi urged the court to grant the application in the interest of justice to prevent the court’s decision from being rendered nugatory if it went in the favour of NCC and AGF.
But Justice Idris Mohammed turned down the application as he said 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.
Idris, who noted that the case was sensitive and of public interest, said he would rather urgently hear the case filed by MTN to challenge the fine and give a judgment within a short time.
He, however, made an order for the parties to maintain status quo ante bellum pending the determination of the suit and adjourned till January 22, 2016 for hearing.
MTN had assembled seven Senior Advocates of Nigeria, led by Chief Wole Olanipekun, to challenge the N1.04trillion fine imposed on it by NCC.
The company contended that NCC could not act pursuant to Section 70 of its establishment Act to impose the fine on it.
But Malami, who took sides with the NCC and justified the imposed fine, said it was his duty, as the chief law enforcement officer in the country, to ensure that all the laws made by the National Assembly.