Friday, 18 December 2015

N1.04 trn fine: MTN Refuses to Pay, Threatens Court Action

MTN Nigeria has finally concluded it would not pay the N1.04 trn fine, the Nigerian Communications Commission, NCC imposed on it, for its failure to disengage about 5.1 million improperly registered subscribers on its network in August and September 2015 and has decided to challenge the NCC in court. Not even the reduction of the fine to N780 billion last week by the commission, could sway the telecommunications company.

Addressing its shareholders, yesterday, MTN said that “all factors having a bearing on the matter have been thoroughly and carefully considered including a review of the circumstances leading to the fine and the subsequent letters received from the Nigerian Communications Commission (NCC).

“MTN Nigeria acting on legal advice has resolved that the manner of the imposition of the fine and the quantum thereof is not in accordance with the NCC’s powers under the Nigerian Communications Act. Accordingly MTN has followed due process and has instructed its lawyers to proceed with an action in the Federal High Court in Lagos seeking the appropriate reliefs.

Appropriate reliefs

MTN is advised that in the current circumstances in line with the lis pendens rule (pending legal action) the parties are enjoined to restrain from taking further action until the matter is finally determined. This is consistent with previous judicial decisions in Nigeria”.

The telecommunications company said that notwithstanding this action, the company will continue to engage with the Nigerian authorities to try and ensure an amicable resolution in the best interests of the company, its stakeholders and the Nigerian authorities. The Nigerian Communications Commission, NCC, last week reduced the N1.04 trillion fine it imposed on MTN Nigeria to N780 billion. However, the commission also mandated the telecom operator to pay the fine on or before December 31, 2015.

Meanwhile, the MTN’s latest decision has attracted several reactions from stakeholders in the industry. While some agreed that MTN reserved the right to seek court interpretation to the issue, others warned of the consequences taking the matter to court might bring to both the company, the sector and the country at large particularly with the level of impact the sector has on foreign direct investment and the country’s GDP.

Chairman of the Association of  Licensed Telecommunications Operators in Nigeria, ALTON, Engr Gbenga Adebayo, said that although MTN has the right to seek court action as a company, over matters that were not clear to it, the implication of taking the matter to court is that investors who would have ordinarily strolled into the country to do business would have to wait to see the outcome of the case before doing so. “I hope this matter would be resolved amicably for the interest of all and the sector. No foreign investor would want to come to the sector now if the matter is in court until they see the direction of the resolution. That is an implication that may also tell on the contribution of the sector to the GDP” he added.

Also president of Teledom Group, Dr Emmanuel Ekuwem, added that taking the matter to court may be a business decision following the nature of Nigeria’s judicial system. “Anything is possible. It may be a business decision, considering that before the case would go through all the levels to Supreme Court, it may have taken five years, of which they may have recouped a lot of gains to pay the fine. But if the court finds out there was an infraction and that the fine by NCC was in the right direction, MTN should know that it would not only pay the fine but also compensations. All these would also impact the sector in one way or the other. So amicable resolution would have served better option”.

In his reaction, President of Association of Telecom Companies of Nigeria, ATCON, Engr Lanre Ajayi, said that going to court to seek clarification, was a right no one should fault MTN on, if all other options have been exhausted. He, however, said that he did not believe that it would impact the sector negatively in any way. The Nigerian Communications Commission, NCC, last week reduced the N1.04 trillion fine it imposed on MTN Nigeria to N780 billion.

However, the commission also mandated the telecom operator to pay the fine on or before December 31, 2015. The fine imposed on the telecom operator followed what NCC described as MTN’s inability to disconnect about 5.1 million Nigerian subscribers improperly registered on its network, after several warnings in August and September 2015.