$8.1bn repatriation: CBN, MTN settle out of court

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…As 9mobile confirms Teleology Holdings’ withdrawal***

Telecommunications firm, MTN Nigeria Communications Limited, said on Thursday that it had reached an agreement with the Central Bank of Nigeria over the $1.8bn being demanded from it by the apex bank.

The $1.8bn demand by the CBN followed alleged forex remittances infraction by MTN.

Rather than yield to the demand, MTN, through its lawyer, Chief Wole Olanipekun (SAN|), sued the CBN and the Attorney General of the Federation before the Federal High Court in Lagos.

In the suit filed before Justice Saliu Saidu, the telecoms firm challenged the powers of the defendants to make the monetary demand from it and prayed the court to restrain them from coming after it.

However, at the December 4, 2018 proceedings in the case, the parties told the court that they were opting for an out-of-court settlement and prayed for a short adjournment to be able to talk.

When they returned to the court on Thursday, Olanipekun said his client had finally reached an agreement with the CBN.

He presented before the court a document containing the terms of the settlement between the parties, which he said, they would love the court to endorse as its judgment on the case.

Mr Henry Ejiofor, who stood in for CBN’s lead counsel, Mr Seyi Sowemimo (SAN), confirmed the position.

Counsel for the AGF, Olanike Idenu, did not oppose the application by MTN and CBN but urged the court to strike out the name of the AGF from the suit.

Justice Saidu thanked the parties for saving the precious time of the court and sparing it the rigours of litigation.

He struck out the name of the AGF from the suit and adopted the terms agreed upon by the parties as the judgment in the suit.

In the suit, marked FHC/L/CS/1475/2018, MTN had urged the court to declare that the CBN acted ultra vires its statutory powers when it wrote an August 28, 2018 letter to it demanding a refund of $8.1bn.

The firm urged the court to hold that the CBN’s $8.1bn demand was “illegal, oppressive, abusive, unauthorised and unconstitutional.”

The telecommunications giant urged the court to declare that “the 1st defendant’s decision in its letter of August 28, 2018, with Ref No GBD/GOV/COM/DGF/118/121, addressed to the plaintiff and titled, ‘Investigation into the remittance of foreign exchange on the basis of the illegal capital importation certificates issued to MTN Nigeria Communications Limited’ were reached in breach of the plaintiff’s right to fair hearing.”

It also urged the court to void a September 3, 2018 letter written to it by the AGF, demanding $8.1bn as “penalties for the offence of ‘infraction of forex remittances’.”

MTN sought a court order “restraining the 1st and 2nd defendants from giving effect to the decisions, demands and directives in their letters of August 28, 2018, and September 3, 2018, respectively.”

However, the CBN, in its statement of defence and counter-claim, urged the court to dismiss MTN’s suit, insisting that the telecommunications giant must refund $8.1bn to the Federal Government.

In the meantime, the Board of Directors of 9mobile has confirmed the exit of Teleology Holdings Limited and its founder, Mr Adrian Wood, from the telecoms company.

Teleology Holdings is a special purpose vehicle comprising telecoms industry veterans and led by pioneer Chief Executive Officer of MTN Nigeria, Mr Wood.

Sources close to 9mobile had disclosed that Teleology Holdings had become increasingly uncomfortable with actions taken outside of the agreed business plan since 9mobile was formally taken over on November 12, 2018.

Sources said Teleology Holdings had been blocked from concluding a management services contract with the local joint venture, Teleology Nigeria Limited.

The management services contract, they said, would have enabled Teleology Holdings and its team of experts oversee the implementation of the organisation’s elaborate business plan including funding proposals.

Expressing his disappointment, Wood had said, “Fifteen Teleology experts have worked since June 2017 on detailed 9mobile turnaround planning, development strategies and financial restructuring.  This included lining up more than $500m fresh direct foreign investment from international institutions. 9mobile is an exciting opportunity to build a revolutionary mobile network that could be the pride of Nigeria, unfortunately, it appears that we will not be able to participate. We now must stand down from further work on the 9mobile project.”

Consequently, Wood was said to have resigned from the boards of Emerging Markets Telecommunication Services (trading as 9mobile) as well as Teleology Nigeria Limited.

However, the Board of Directors of 9mobile, on Thursday, in a statement signed on its behalf by the Director, Regulatory and Corporate Affairs, Oluseyi Osunsedo, confirmed the exit of Wood, saying it was better off without him.

Osunsedo said in the aftermath of the protracted mismanagement of an otherwise healthy company, and eventual default on its loans by the previous owners, 9mobile was acquired by Teleology Nigeria Limited.

He explained that the acquisition followed an internationally competitive and exhaustive bidding process led by Barclays Africa, with the participation of the Central Bank of Nigeria, the Nigeria Communications Commission and 13 Nigerian banks.

He noted that the acquisition process was concluded with the initial deposit of $50m and a further payment of $251m as a settlement to the banks that took over the company.

According to the statement, the payments, as well as further due diligence and technical evaluations, led to the clearance of the sale by the NCC and handover of 9mobile to the new owners.

According to Osunsedo, Teleology Nigeria Limited is a consortium that has several local and foreign investors.

He said while every partner in the consortium was delivering and meeting their obligations to the partnership in terms of financial resources, physical availability for crucial meetings and extensive network to help build the business, Wood’s Teleology Holdings Limited, which only owned a minority stake in Teleology Nigeria Limited, failed severally and wholly to meet its obligations.

He added that Wood was not personally present for all the critical presentations made by the consortium during the bid process and failed abjectly with his financing arrangements with Swiss-based UBS Bank.

The statement read in part, “In all these failings, other partners in the consortium filled the gap and pushed ahead until the sale was completed.

“Since taking over the company and without any assistance from Mr Wood or Teleology Holdings, the board has revived and enhanced relationships with key vendors and core business accounts; improved business relationships with suppliers; enhanced its core network capabilities to deliver network efficiency competitively with other operators.

“With the assistance of leading global consultants, the company is also undertaking a complete review of its operational, regulatory, financial and technical architecture.”

It stated that the company emerged from a period of uncertainty over the past two years to attain an active subscriber base of 16 million, representing a net increase of over one million subscribers in the last six weeks alone.

Punch