Why it took almost 9 years to uncover MTN’s illegal repatriation of $8.1bn

The governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, on Thursday gave reasons why it took the apex financial industry regulator almost nine years to uncover alleged systematic repatriation out of Nigeria of over $8.134bn profits by MTN Nigeria.

Mr Emefiele, who spoke on Thursday at the end of the monetary policy committee (MPC) meeting in Abuja, rejected accusations the CBN neglected its monitoring and regulatory role and allowed the illegal transfers by the South African telecoms firm to fester.

Last August, Mr Emefiele announced CBN’s decision to impose various sanctions totalling about N5.87 billion against four banks accused of “flagrant violation” of foreign exchange regulations.

The banks, namely, Standard Chartered, Stanbic-IBTC, Citi and Diamond, were alleged to have facilitated remittances of foreign exchange using irregular Certificates of Capital Importation (CCIs) issued on behalf of some offshore investors of MTN Nigeria Communications Limited.

The transactions, which occurred between 2006 and 2015, were never reported by the CBN until this year.

As part of the sanctions, MTN Nigeria was asked to reverse the transaction by returning to CBN the $8.134bn repatriated without final approval and follow the due process in repatriating such funds.

Announcing the sanctions against the four banks in August, the CBN spokesperson, Isaac Okorafor, said investigations were ordered in March 2018 after the banking supervision department of the apex bank discovered a trail of the alleged illegal transactions more than two years earlier.

Last week, the US Consul General, John Bray, and British Deputy High Commissioner to Nigeria, Laura Beaufils, passed scathing criticisms of CBN’s handling of the matter.

Describing CBN’s decision to sanction MTN Nigeria and the banks as “rash” and “damaging” to prospective investors in Nigeria, the two envoys indirectly accused the CBN of neglecting its regulatory responsibilities over the matter for almost nine years.

However, the CBN governor in answering reporters’ questions on the matter at the end of the MPC meeting, said it was better to go about it slowly, considering the sensitive nature of the matter.

“It is better to be slow in taking some of these decisions; to be sure (that) when (they are) taken, you know they are potent and there are rationales for those decisions,” Mr Emefiele said.

In the case of MTN and the four banks, he said there were sufficient rationale and justification for CBN to have taken the actions it took against these entities.

Apart from alleged illegal issuance of CCIs beyond the 24 hours approved by law and several others issues, there was also the issue of illegal repatriation of $8.134bn, which he noted appeared to have generated some attention the CBN did not anticipate.

“There was rationale for the decision we (CBN) took. We expected certain documents (from MTN and the banks) to be submitted, that never came,” he said.

The CBN governor said after meetings with the managements of both the banks and MTN Group from South Africa, those documents have now been submitted, which are currently being reviewing by the auditors and bank examiners.

“We are in the process. We can say the matters will soon be resolved. We are at the verge (it is as good as announcing the resolutions). But, please spare me the stress of not talking about what the agreements are at this time. At the appropriate time, this will be announced.

Regardless, Mr Emefiele re-emphasized the sanctity of the CCIs issued by Nigerian banks to foreign investors, saying they remain sacrosanct.

He said the CBN would never compromise on the enforcement of their regulatory requirements.

Although the matter with MTN was being resolved, he said it did not mean the company did not have issues.

“When we say the issues have been resolved with MTN, it does not mean there are no issues. Yes, there are issues. But, the point is they are being resolved. These issues will be resolved equitably and amicably, to the benefit of all.