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MTN to Challenge $3.9B Fine in Nigerian CourtMTN to Challenge $3.9B Fine in Nigerian Court

African operator says Nigerian authorities did not have right to impose heavy fine.

Iain Morris

December 18, 2015

2 Min Read
MTN to Challenge $3.9B Fine in Nigerian Court

South Africa's MTN says it will challenge the $3.9 billion fine recently imposed on it in Nigeria, claiming the country's telecom authorities did not have the right to act as they did.

The operator, which provides services in a number of African markets, was hit with a $5.2 billion fine in October after failing to disconnect unregistered mobile phones, which authorities fear are being used by terrorist organizations and other criminal groups.

The amount was subsequently reduced to $3.9 billion by the Nigerian Communications Commission (NCC), but that still equates to about 1.5 times what MTN Group Ltd. made in post-tax profit last year.

Concern about the impact of the fine has led to a 30% fall in MTN's share price since late October and prompted the resignation of CEO Sifiso Dabengwa.

Acting on the advice of its lawyers, MTN is now saying it will challenge the fine in Nigeria's Federal High Court.

"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 and therefore there are valid grounds upon which to challenge the fine," said the operator in a statement.

MTN says it reached its decision to pursue legal action after reviewing circumstances leading up to the fine and letters it subsequently received from the NCC.

However, it is hoping to find an "amicable resolution" it says would be in the best interests of all parties involved.

In the meantime, it has advised shareholders to exercise caution when dealing in its securities until it has provided an update.

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About the Author(s)

Iain Morris

International Editor, Light Reading

Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).

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