MTN seeks out-of-court settlement over $3.9 billion fine

22 Jan 2016
Chibuike Oguh

Summary

Justice Mohammed Idris of the Federal High Court, Lagos, adjourned the suit to March 18th to enable both parties reach an agreement on the matter.

Phuthuma Nhleko, Executive Chairman, MTN

MTN Group asked a judge on Friday for an out-of-court settlement in its suit challenging the powers of the Nigerian Communications Commission (NCC) to impose a $3.9 billion fine for the telecom giant’s failure to disconnect unregistered phone lines.

In a major reversal of its earlier stance, MTN’s lawyers, led by Wole Olanipekun (SAN), asked Justice Mohammed Idris of the Federal High Court, Lagos, to suspend the case while MTN attempts to negotiate an out-of-court settlement with the NCC.

According to an MTN statement, Justice Idris adjourned the suit to March 18th to enable both parties to reach an agreement on the matter.

“If the parties are unable to reach a settlement the matter will then proceed on that date,” MTN said.

MTN’s share price rose by over 9 percent on Johannesburg Stock Exchange – the most in over six years – after the statement was released. The share price stood at 121.43 rand as at 11:27am GMT.

Since October last year, MTN, Africa’s largest telecoms operator, has been trying to resolve its dispute with the NCC caused by the record fine imposed on the company for failing to disconnect five million unregistered phone lines. MTN sued the NCC in December after the regulator slashed the fine by 25 percent, from $5.2 billion to $3.9 billion.

In a statement released on Tuesday, MTN confirmed news reports that its Nigerian unit made an after-tax profit of nearly $1 billion (N190 billion) in 2015.

Chibuike Oguh is Financial Nigeria's Frontier Markets Analyst


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