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Senate committee exonerates MTN, crucifies CBN instead

Senate committee exonerates MTN, crucifies CBN instead

The Senate committee formed to investigate MTN illegal repatriation of $14 billion out of the country has exonerated the telecoms firm and rebuked the Central Bank of Nigeria for regulatory failures.

The Senate, however, withdrew the report for lack of credibility.

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The report, presented to the Senate on Thursday was sent back for rework because it did not capture possible infractions by all stakeholders, Reuters reports two people familiar with the matter to have said.

The upper house agreed in September to investigate whether Africa’s biggest telecoms firm unlawfully repatriated $13.92 billion from Nigeria – its most lucrative market which generates a third of its revenue – between 2006 and 2016.

MTN has denied any wrongdoing.

The crux of the allegation is that MTN did not obtain certificates declaring it had invested foreign currency in Nigeria within a 24-hour deadline stipulated in a 1995 law, making the repatriation of returns on the investments illegal.

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The Senate formed a committee to investigate the allegations against the South African company, the Central Bank of Nigeria (CBN) and commercial lenders such as Nigeria’s Stanbic IBTC Bank PLC.

The committee’s report did not recommend any punitive measures against MTN.

Instead, the report rebuked Nigeria’s central bank for its failure to monitor fund transfers to and from the country, calling its oversight of banks “inadequate”.

The report recommended that the Senate “condemned the Central Bank of Nigeria for failing in its duty” to address problems with monitoring foreign exchange transfers.

The CBN’s duty is to correct and if needed sanction banks and their customers for any wrongdoing, which it never did, said the report, adding that the central bank never testified to the committee that there were any infractions.

By never applying sanctions, the CBN had lent credence to the banks’ argument that they were not breaking any rules by transferring foreign currency, the report said.

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A CBN spokesman was not immediately available for comment.

However, the report also urged the central bank to “sanction Stanbic IBTC for improper documentations in respect of capital repatriation and loan repayments amounting to $388,195,183 and $199,440,952 respectively”.

Stanbic IBTC was not immediately available for comment.

The findings were met with dismay by some in the Senate.

Senators did not understand why the report largely condemned the CBN while MTN and named commercial banks which transferred money overseas were barely reprimanded, said one of the people familiar with the investigation.

The document is a “poorly investigated report full of indecent holes”, the person said, speaking on condition of anonymity.

The report has now been “withdrawn for consultations and further legislative work”, said the other person with knowledge of the investigation.

It is the latest regulatory issue affecting MTN in Nigeria. MTN paid 30 billion naira ($98 million) to the Nigerian government in part settlement of a 330 billion naira fine imposed on the telecoms group for not disconnecting unregistered SIM cards, an MTN source told Reuters in March.

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