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Shareholders have reacted sharply to the Central Bank of Nigeria (CBN)’s order on the suspension of MTN Group’s dividend payment from its Nigerian subsidiary, MTN Nigeria, over an alleged illegal repatriation of funds to South Africa.
The shareholders, who spoke to The Guardian, yesterday, faulted the move, insisting that dividend that has been declared must be paid.
The South African telecoms giant in a quarterly update to its shareholders, yesterday, in Johannesburg, South Africa, claimed that it was not guilty of the illegal repatriation charges levelled against it by the Nigerian Senate.
The CBN had ordered the four commercial banks operated by MTN to suspend dividend payout from Nigeria. The banks are Standard Chartered Bank, Stanbic IBTC, Diamond Bank and Citi Bank. But CBN Spokesman, Isaac Okorafor, said yesterday that he was not aware of the order.
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 and therefore the repatriation of returns on those investments was illegal.
MTN runs the biggest wireless phone network in Nigeria, which generates a third of its annual sales. The telecoms firm had this year, agreed to pay a reduced fine of N330 billion ($1.08 billion) to end a long-running dispute over unregistered SIM cards in Nigeria.
The South African firm has also delayed its long-awaited listing on the Nigerian Stock Exchange (NSE), and no explanations from the firm or the exchange for the delay.
Shares in the company have fallen by more than 14 per cent to their lowest level in more than six years since the latest issue surfaced on September 27.
But shareholders, who spoke to The Guardian on the development, criticised the CBN’s decision as high-handed, considering that the dividend is shareholders’ benefits from their investment.
The President, Renaissance Shareholders Association of Nigeria, Timothy Olufemi, described the suspension of the dividend as ‘uncalled for,’ noting that dividend declared is a debt that must be paid by the firm.
“Well, the accusation may be due to payment of cash dividend to foreign shareholders in dollars without due approvals. But, we do not see any reason for the suspension of cash dividend if not that they have done something wrong. It is uncalled for. Dividend must be paid when declared. It is a debt,” he said.