JOHANNESBURG– South African telecommunicatios giant MTN has lost almost a third of it’s market value since last Thursday with its share price falling more than 30 per cent since its Nigerian subsidiary was accused of violating foreign exchange regulations by repatriating dividends amounting to 8.1 billion US dollars between 2007 and 2015.
The Nigerian authorities now claim that MTN did not pay at least 2.0 billion USD. MTN has refuted the claims, saying it will engage the relevant authorities.
Although MTN operates in more than 20 countries, the company’s Nigerian business makes up a third of its annual profit and analysts say the latest developments will lead to Nigeria being perceived as a risky market for business.
MakweMasilela of Makwe Fund Managers here said Wednesday: “I think it’s more a reflection of Nigeria as a country. Do you really want to do business there and also in the past they denied any wrongdoing so there is still a story there.”
Masilela thinks that Nigeria is still a lucrative business for MTN and that the company is not likely to exit that country any time soon.
“It’s a very lucrative market for them. I don’t think they will just walk away; they can still make good money if they are focused … but only if they get it right.”
The latest news comes two years after MTN was made to pay 1.0 billion USD over unregistered SIM cards of some Nigerian subscribers.
The company was also hit by US president Donald Trump’s sanctions on Iran making it difficult for MTN to repatriate funds from that country.
Source: NAM NEWS NETWORK