A Senate report dated November 8, 2017, actually exonerated MTN Nigeria of an alleged illegal repatriation $13.92 billion to its headquarters in South Africa between 2006 and 2016, BusinessDay findings indicate.
The report rather urged the Central Bank of Nigeria (CBN) to sanction one of the banks for infractions in the foreign exchange transfer deal, but was silent on the activities of three other commercial banks: Standard Chartered Bank, Citigroup and Diamond Bank, which the apex bank fined on Wednesday.
The Senate specifically mandated the CBN to sanction the bank for improper documentations in respect of capital repatriation and loan repayments amounting to $338,195,183 and $199,440,925, respectively, on behalf of MTN.
It also ordered the apex bank to sanction the activities of the bank’s Nominees in the matter of shares transfer and splitting for the purpose of dividend repatriation.
The Senate recommendations followed the adoption of the report of the Committee on Banking, Insurance and other Financial Institutions on the alleged violation of the Foreign Exchange Monitoring and Miscellaneous Act by the mobile company.
The report was contained in the Votes and Proceedings of Wednesday, November 8, 2017, which had since been approved in Senate plenary on November 9, 2017.
It would be recalled that in September 2016, the Senate agreed to investigate whether Africa’s biggest telecoms firm unlawfully repatriated $13.92 billion from Nigeria – its most lucrative market, which generated a third of its revenue – between 2006 and 2016.
But in July 2017, the apex legislature rejected an earlier version of the report, asking the committee to carry out extensive work.
The allegations first appeared in a motion proposed by Dino Melaye (PDP, Kogi State), to launch an investigation into MTN’s illegal transfer of $13.92 billion.
The Senate motion said Stanbic IBTC, Standard Chartered Bank, Citigroup and Diamond Bank were involved in the alleged illegal transfers, while trade and investment minister, Okechukwu Enelamah was among people used by MTN to help repatriate the funds.
But in its report on November 8, 2017, the panel directed the apex bank to sanction one of the banks, while the other financial institutions as well as MTN, were exonerated.
The document, which was signed by 10 of the 13-member panel, also rebuked the CBN for its failure to monitor fund transfers to and from the country.
“The Committee condemns the CBN for failing in its duty to bring forth those observed deficiencies of Federal Exchange Monitoring and Miscellaneous Act (FEMMA) for amendment, rather than granting extensions and exemptions which became prone to abuses.
“It directs the CBN to forthwith render periodic status reports to Senate on the performance of foreign investments inflows and outflows,” the report seen by BusinessDay stated.
It also mandated the CBN to come up with a proposal for the amendment of FEMMA with a view to ensuring the growth of the economy through massive foreign capital inflow and greater retention of foreign exchange.
Presenting the report, chairman of the committee, Rafiu Ibrahim (APC, Kwara State) had observed that the sanctioned bank admitted improper completion and inadequate information on remittances and capital repatriation for dividends and loans.
He pointed out that as shown in the schedule of remittances provided by the bank, remittances were carried out without documentations, supporting documents and evidence of capital repatriation and loan payments.
The report also observed that some of the contraventions were due to poor institutional supervision, systemic lapses and gaping opportunity for the rational investor to exploit.
The Senate panel report submitted and unanimously adopted by the lawmakers condemned the CBN for its policy role in facilitating the repatriation.
The Senate “condemn the CBN for failing in its duty to bring forth those observed deficiencies of FEMMA for amendment rather than granting extensions and exemptions, which became prone to abuses.
“Mandate the CBN to sanction Stanbic IBTC for improper documentations in respect of capital repatriation and loan repayments amounting to $388,195,183 and $199,440,952:07, respectively.
“Mandate the CBN to sanction the activities of Stanbic IBTC Nominees in the matter of shares transfer and splitting for the purpose of dividend repatriation.
“Mandate the CBN to come up with a proposal for the amendment of FEMMA, with a view to ensuring the growth of the economy through massive foreign capital inflow and greater retention of foreign exchange. The amendment is still ongoing in the Senate.
“Direct the CBN to forthwith render periodic status reports to Senate on the performance of foreign investments inflows and outflows.”
On August 29, 2018, the CBN wielded the big stick on MTN Nigeria, and four commercial banks for alleged financial infractions.
In a statement, CBN’s spokesperson, Isaac Okorafor, said the apex bank wrote to MTN Nigeria demanding a refund of about $8.13 billion (about N2.5trn at N306.15 to $) allegedly repatriated illegally out of Nigeria.
Okorafor said the affected banks, including Standard Chartered Bank, Stanbic-IBTC, Citibank and Diamond Bank, would refund various amounts totalling N5.87 billion.
Standard Chartered was asked to refund N2.5 billion; Stanbic IBTC (N1.9bn); Citibank (N1.3bn and Diamond Bank (N250m).
The banks were accused of committing “flagrant violation of extant laws and regulations of the Federal Republic of Nigeria, including the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 and the Foreign Exchange Manual, 2006.”
