MTN have released a SENS this morning updating shareholders on the ongoing negotiations around the fine in Nigeria. The middle part reads as follows:
Shareholders are advised that the Executive Chairman of the Company, Mr Phuthuma Nhleko, has personally met with the Nigerian authorities to continue the ongoing discussions with them regarding the fine of N200,000 for each unregistered subscriber ("the fine"), the equivalent of US$5.2 billion imposed on MTN Nigeria by the Nigerian Communications Commission ("NCC"). These discussions include matters of non-compliance and the remedial measures that may have to be adopted to address this.
Although the Nigerian Communications Commission ("NCC") set a deadline for payment of the fine by Monday, 16 November 2015, shareholders are advised that the Nigerian authorities have, without prejudice, agreed that the imposed fine will not be payable until the negotiations have been concluded.
You can read into that however you want. One, you can say that the delay means that there could well be a lower fine instituted on the company, as the negotiations are ongoing. Two, you could read into this that the Nigerian authorities are standing firm, and MTN are scrambling for more time. I was taken to task by some fellow on Twitter who obviously thought that my objections to the Nigerian fine as being overreaching, heavy handed and downright dumb for long term investors was one sided, pointing out that the BP fine was taken in its stride.
I was then feeling a little vindicated and almost fed the trolls when I saw this Bloomberg story:
MTN Suffered 'Shake Down' by Nigeria Regulator, Wells Fargo Says, in which the fund manager is quoted as saying
"MTN Group Ltd. has been the victim of a "shakedown" by Nigerian regulators" and
(t)he fine "is outrageous by any rational stretch of punishing the company". Exactly. And, wait for it, the point I was trying to make all along
this has "seriously negative investment implications" for the country. Whilst I agree that all companies must abide by all the rules of the lay of the land, it is possibly more than a little dumb to cook, hang, draw and quarter the golden goose.
There are signs that the powers that be are thawing a little, the vice president was making noises about how important telecommunications were to taking the economy away from the reliance on oil revenues. Agreed. Time to make all companies more successful and collect more revenues for infrastructural development, that will facilitate the way forward. I am sure that many entrepreneurs in Nigeria wish for all of the above. We continue to watch, we continue to advise shareholders to do nothing with the shares until we have something concrete.