Senate Reveals MTN’s N300bn Proposal as Settlement for Fine

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Senate floor

• Turf war between AGF and Communications Ministry/NCC simmers

MTN’S PROPOSED N300BN PAYMENT PLAN
• N50bn already paid in “good faith”
• N100bn via electronic transfer between Dec 31, 2016 and Dec 31, 2020
• N80bn investment in Nigerian sovereign debt instruments in 2016-2017
• N70bn through the provision of broadband access to the FG (subject to excess capacity on MTN’s fibre network) for its e-initiatives

Omololu Ogunmade in Abuja
The Senate Committee on Communications yesterday revealed that MTN Communications Nigeria Limited has proposed to pay N300 billion ($1.5 billion) in the ongoing negotiations between the company and Attorney General of the Federation and Minister of Justice, Abubakar Malami (SAN), on the N780 billion fine imposed on the network operator by the Nigerian Communications Commission (NCC).

The industry regulator imposed a N1.04 trillion fine on MTN last October for failing to disconnect 5.2 million unregistered subscribers on its network, but later reduced it to N780 billion and gave the network provider till December 31, 2015 to pay up after it had appealed for leniency.

But before the deadline, MTN sued the federal government challenging the power of the federal government and NCC to impose the fine.

Last month, it withdrew the case and paid N50 billion as a gesture of good faith towards the settlement of the fine.

The penitence exhibited by MTN paved the way for negotiations with the federal government led by Malami and the South African-owned firm led by former US Attorney General, Mr. Eric Holder.

At an investigative hearing held yesterday by the Senate committee in the National Assembly, vice chairman of the committee, Senator Adeola Olamilekan (Lagos West) brandished a proposal acknowledged by the Solicitor General of the Federation, Taiwo Abiodun, from MTN wherein the network provider insisted that it could only pay N300 billion.

A breakdown of the proposal which was forwarded to the Ministers of Communications and Finance by the solicitor general as well as NCC executive vice chairman, Prof. Umar Dambatta include the N50 billion already paid by MTN into a recovery account of the Central Bank of Nigeria (CBN) and another N100 billion to be paid via electronic transfer between December 31, 2016 and December 31, 2020.

The proposal also includes another N80 billion proposed payment by MTN as a demonstration of its commitment to and confidence in the Nigerian economy and will be subject to necessary regulatory approvals,

This would come by way of MTN Nigeria committing to purchase N80 billion of Nigerian sovereign debt issued on the international market in 2016-2017.

The last tranche of N70 billion which the network provider proposed will be through the provision of broadband access to the Federal Government of Nigeria (subject to excess capacity on the company’s fibre network) for the purpose of the government’s e-initiatives (e.g. visa processing, public service, connecting schools, registration, etc.).

If accepted, the broadband access valued at N70 billion will commence from the date of the execution of the agreement between the federal government and MTN to December 31, 2020.

Olamilekan, having brandished the document, accused the AGF of deceiving Nigerians that negotiations were still ongoing with MTN, whereas he had already executed an agreement with MTN that will allow the company pay the proposed N300 billion in four years.

However, an official from the AGF’s office dismissed the charge, describing the document as a proposal which he said was not an end in itself but a means to an end.
But Olamilekan disagreed, insisting that the government was only playing on Nigeria’s intelligence and questioned the rationale behind the acceptance of N50 billion from MTN, which was the first tranche of the payment as contained in the proposal, and yet claiming that negotiations were still ongoing.

The session was attended by Minister of Communications, Mr. Adebayo Shittu, Dambatta, another representative of the AGF, Mr. Dayo Apata, MTN’s Chief Executive Officer, Mr. Ferdinand Moolman, acting Director of Banking and Payment System Department of the CBN, and the Accountant General of the Federation, Mr. Ahmed Idris.

The meeting revealed how the AGF and presidency kept NCC and Shittu in the dark in the negotiations with MTN on the fine.

While Shittu said he was not part of the entire negotiation process, Dambatta said NCC was not responsible for the reduction of the fine from N1.04 trillion to N780 billion, saying it was only invited to a meeting of an inter-agency committee set up by President Muhammadu Buhari.

He said the committee reduced the fine by 25 per cent following the president’s approval after MTN wrote a letter of apology to the government.
Both Shittu and Dambatta said they were not aware of negotiations between Malami and MTN that led to the payment of N50 billion by the latter into the CBN recovery account on February 24.

Shittu maintained that the matter was between Malami and MTN. According to him, since the matter went to court, his ministry and the NCC had virtually been kept at arms length on the matter, adding that when MTN indicated its decision to settle the matter out-of-court, the AGF gave it two conditions for the out-of-court-settlement.

He listed the conditions to include making a down payment of six per cent of the total fine, amounting to N50 billion first, and withdrawal of the suit, both conditions which he said MTN fulfilled.

In his submission, Dambatta disclosed that the fine of N1.04 trillion imposed on MTN by NCC was predicated on a charge of N200 per line that was not registered by the company, in line with its directive at the time.

However, he said the negotiations on the N1.04 trillion fine down to N780 billion was handled by an inter-agency committee set up by the president to look into the fine, to which he said NCC was invited.

According to him, based on a letter of apology written by MTN and its remission, Buhari gave approval to the committee to reduce the fine by N25 per cent, thus bringing it down to N780 billion.

He further disclosed that NCC was not informed about the move to settle the case out of court neither, nor was it a party to the payment of N50 billion to CBN.
On its part, MTN explained that the process leading to the payment of N50 billion began when it made its intention to settle out-of-court known to the AGF.

According to MTN’s chief executive, who echoed the communications minister’s submission, the AGF had informed them that the federal government’s interest in the matter would be dependent on MTN’s preparedness to fulfill the two conditions enumerated by AGF, which he said MTN fulfilled.

But the representative of the AGF who said Malami was unavoidably absent due to a trip out of the country, said on January 22 while in court, MTN had indicated its interest in settling the matter out of court and after being told to do so in “good faith”, by meeting the two conditions, it requested for a long adjournment, which he said was granted by the court.

He said it was these actions that led to the adjournment of the case to March 18 by the court.

When asked why MTN was asked to pay the money into a CBN account and not the NCC account, Apata said he did not know.

However, the accountant general said though his office was not involved in the negotiations, he only got involved in the matter when the AGF asked him to facilitate the opening of an asset recovery account with the CBN. He said the account was credited with N50 billion on February 24.

When the committee questioned the AGF’s representative on the legality of the account, he said he was not in a position to say whether it was legal or not.

Through out the questioning the Senate committee did not conceal its displeasure with the entire process, with Olamilekan demanding to know the right of the AGF to enter into negotiations with MTN while sidetracking other major stakeholders – Ministry of Communications and NCC – in the matter.

He accused the AGF and accountant general of having ulterior motives in the matter by taking over the jobs of NCC and Ministry of Communications.

Also speaking, Senator Abiodun Olujinmi (Ekiti South), said impunity usually begins with the abuse of a process, saying having served on the board of NCC, imposition of fines on telecommunications company by NCC was a regular norm.

According to her, such fines are usually paid into the NCC account, for subsequent transfer by NCC into the Federation Account.

According to her, Malami and Idris had shaved the heads of Shittu and NCC in their presence by totally taking over their jobs.

She described the entire negotiation process as “voodoo” and faulted the opening of a recovery account for money that was not stolen, describing it as a clandestine move to circumvent due process.

She also queried the rationale behind the determination of 6 per cent of the fine, amounting to N50 billion paid by MTN.

“You asked them to pay 6 per cent of N780 billion. And you said it was in good faith. Who determined that? You asked them to withdraw the case from court and you said the case is still in court,” she said.

Another member of the committee, Senator Isa Misau (Bauchi Central) did not mince words in accusing the attorney general, CBN and accountant general of a criminal conspiracy with MTN.

But they disagreed with the senator, saying their action had nothing to do with a conspiracy of any kind with MTN against their country.

Nevertheless, the committee chairman, Gilbert Nnaji, said since the AGF who is the principal player in the matter was not available to answer pertinent questions, the meeting would be adjourned indefinitely.

He also asked the accountant general and the AGF to go back and review their actions and carry the ministry and NCC along.

However, the outcome and remarks made during the meeting of the Senate Committee reflected a similar outcome at a meeting of the House Committee on Communications on Wednesday during which the committee in the lower chamber insisted that MTN must pay the entire N1.04 trillion penalty, instead of the reduced fine of N780 billion.

Both meetings further exposed the simmering turf war between the Office of the AGF, on one side, and the Communications Ministry and NCC, on the other side, over negotiations on the MTN fine.

It is believed that the Communications Ministry and NCC went crying to the National Assembly with information on the negotiations in order to project the AGF in a bad light.

Speaking on the issue yesterday, an industry analyst added that the ministry and NCC were also not happy that a fund recovery account with the CBN was immediately set up by the accountant general on the directive of the AGF, meaning that whatever funds are paid into the account will be out of their reach.

However, he expressed displeasure over the payment terms on the N300 billion proposed by MTN as full and final settlement of the fine, saying that whilst the amount could be considered reasonable, the payment terms were unacceptable, condescending and should be rejected by the federal government.

“What we expect to see are proper cash injections staggered over a reasonable period, not an offer of broadband access of N70 million that will be subject to excess capacity on the MTN network,” he said.

  • Daniel

    Very good proposal from MTN. We never had a leader in our recent history who could impose fines or negotiate tough agreements.

    Now other companies will learn to take us serious.

    • Darlington

      Hypocrite! A leader that would usurp the powers of other government agencies. A leader that does not believe in rule of law. A leader that runs Federal Government affairs like private matters. A leader that behaves as if Nigeria belongs to him. The fine on MTN is good decision, but the way and manner the AGF and AG are going about it smacks of conspiracy to short change the nation.

      • Daniel

        We need more than a dictator, so long he is patriotic. We were in a chaotic situation in which militants reigned supreme and usurped government institutions for their own benefits.

        Listen, the House of Assembly has a lot of work to do. There are social welfare laws and business -friendly laws to be made. Buhari is not stopping them from doing that.

        They must stop being reactive and start being proactive in that chamber. That place is not supposed to be a pepper soup joint.

        Buhari knows how they held Jonathan bound for years. PIB they refused to pass. Now why complain, if Buhari uses his executive powers to do what has to be done. The same thing Obama is doing in America.

        We are in a state of emergency. No time for cheap and selfish politicking.

        • The Analyst

          Daniel, If I hear you well, the NASS is now the problem and no longer GEJ?
          Did we vote for dictatorship or democracy?
          MTN was fined by NCC and not Buhari, his AGF went around to negotiate a lower fine and the NASS insisted that the full fine should be paid.
          I do not know how NCC specified for the fine to be paid, but what I have read so far is MTN is now saying “How much they will pay” and “How they will pay it”
          Lets think about this before applauding.

          • Daniel

            Stop worrying yourself about bureaucracy. That will take care of itself later. What matters is MTN has now recognised that there are laws in Nigeria to be obeyed.

            Were these violations not there in Jonathan’s time? Was the Senate not there when these violations took place? They are not relevant anymore. What happened to subsidy thieves?

            I read news articles that wanted military intervention in Jonathan’s era for very cogent and justifiable reasons.

            It is all about negotiation. MTN employs Nigerians, so you do not kill a fly with a sledge hammer in the world of business.

          • Demola

            Do you know how many people that have been killed or kidnapped because of MTN irresponsible actions? This is the problem with Nigerians, just because they employed Nigerians should not give them the rights to break the law, they should be made a scape goat, I don’t care what happens to the company. Black people are always compromising to crime. How much tax have they paid since being set up in Nigeria? they are in habit of repatriating their profits to an offshore company, what is the essence of being established in Nigeria? They took advantage of the economy, cheap labour and corrupt politicians to make money in Nigeria, can they break South Africa law? Nonsense.

          • Daniel

            What did Jonathan do about it? How much did Jonathan fine MTN? Or you want to claim Boko Haram started with this administration.

            Buhari has shown leadership just within a short time of being in power. That is my point.

            I do not expect you see the positive difference between today and the past.

          • Demola

            This has nothing to do with Buhari or Jonathan, Buhari is not doing anybody a favour by upholding the law, it is the rightful and sensible thing to do as a leader, whatever the circumstances, due process must followed, in this light, a fine was imposed and it must be paid. We should stop being grateful to leaders who implement the law. How long are we going to talk about Jonathan who is in the past? we should not condone impunity by intervention, MTN was fined by NCC, they should deal with NCC directly instead of running to the presidency, that is undermining the agency authorised to carry out the job. The country does not belong to Buhari. This is the reason we elected the senators. Whether it is MTN, GLO, ETISALAT or any other network provider who breaks the law, they should be punished accordingly.

          • Daniel

            It has a lot to do about leadership and determination to succeed.

          • Demola

            What is the difference between a leader who doesn’t uphold the law and the one who claimed to uphold the law but ostentatious? still the same result….A fine was never imposed VS a fine imposed but never paid. Still ignominious defeat and circuitous route.

          • Daniel

            Read your history books and you will see leaders who did things unconventionally to move their countries forward. We have to do things the unusual way to move Nigeria forward,else we risk stagnation.

            What matters most is for the leader to have a good heart.

          • Artful ºDodger

            Waywardness is not democracy neither is enforcing the law dictatorial.

            You igbo must learn to be able to separate the two!

        • Azubuike Anene

          YOU AMAZE ME WITH YOUR POOR INTELLECTUAL RANTINGS.
          OUT OF A FINE OF N1TRILLION, YOU ARE CELEBRATING N300B THAT WILL BE PAID IN “5YRS”, IN A “CBN” RECOVERY? ACCOUNT,THAT ONLY MALAMI AND IDRIS CAN CONTROL?
          IF WE ACCEPT THAT,WE HAVE LOST N700B!
          AND THE N300B “RECOVERED” CAN AS WELL BE MALAMI AND IDRIS’ MONEY.
          SO WHAT ARE YOU CELEBRATING.?
          EVEN A MONKEY WILL KNOW HE HAS BEEN SHORTCHANGED.ALL THE TALKS ABOUT ” NEGOTIATIONS” AND PRESIDENT APPROVING THE 25% REDUCTION,ARE AKUKO-IFO.THE PRESIDENT WASN’T PARTY TO THESE DISCUSSIONS.

          • Daniel

            How much was MTN fined when Jonathan was there? Nothing! You cannot kill a fly with a sledge hammer like I said. MTN employs Nigeria who are by extension stakeholders. That is the essence of negotiation. one plus one is not always two in negotiation.

            MTN saw the wisdom in withdrawing its case in court. It shows remorse and commitment or good faith. We are now earning our respect again as a sovereign country.

            This is a good start.

          • Azubuike Anene

            THE MTN FINE OF N1.04 TRILLION WAS MADE BY JONATHAN ADMINISTRATION.
            BUT I AM NOT INTERESTED IN WHAT EVER ADMINISTRATION,
            UNLIKE YOU.
            MY INTEREST IS GOOD,RESPONSIBLE & RESPONSIVE GOVERNANCE.
            GOOD LUCK JONATHAN HAS LONG FINISHED HIS ADMINISTRATION..

          • Daniel

            Jonathan failed to collect a dime because he could not uphold the laws of the land. History matters.

            I fully appreciate Buhari’s efforts because he has made it clear that Nigerian laws will not be trampled upon, to the extent Jacob Zuma who made us a laughing stock in the weapons deal, had to come to Nigeria to seek diplomatic solutions.

            Buhari has courage to act. But I don’t expect you to agree.

      • Artful ºDodger

        What rule of law? Has the demons that possessed you all and your nnamdi canoe finally left you? Yes Nigeria belong to Buhari and everyone who think she is his country just as every Nigerian belong to Nigeria. He is the president and he was elected to guide Nigeria down a path of righteousness away from the waywardness that define Nigeria which you are used to and which he is addressing right now.
        Sorry if it hurts o but this change is here to stay!

    • Bayo Erinle

      I agree with you. The resolution is okay. MTN has shown remorse. Now, no business is above the law. This is the lesson everybody need to learn. This is the way to make all to tie the line so that we ca have an orderly society. Kudos Buhari. Change is here.

    • xabnuq

      I see..Banana republic where everything goes… Thats what we are turning the country into!!so how on earth would government play with the security of it’s nations?.can 1 trillion buy those that have been killed?..when BP oil split occured ..they pay the whole fine at the specified time.was it not the mtn that went to court at first instance?what is the agf business with this fine at this stage?all this stance by government exposes our “low self esteem”..as a country..they should allow Ncc do its job.something is smelling here.forget about the job mtn gave to Nigerians..is it for free?..they rake in billions everyday and you are here saying that they give Nigerians job…to hell with foreign direct investment if we cannot up hold the law of the land!

      • Daniel

        We are rather becoming a country whose laws are respected. A country whose leaders are taken seriously. Not the past where we had clowns,militants and prayer warriors in government . People who thought they could pray Nigeria out of poverty.

        There is nothing wrong with negotiations. In the past that money will not see the light of day. Government officials will not even be able to ask for it, except taking bribes.

        WE are becoming a giant again. It is a matter of time.

    • chimex

      There is no way you can convince me that this is a good deal. I will tell u why soon.

      • Daniel

        Okay. No wahala…. But it makes me feel good.

    • Chijioke Oweregbulam

      I beg to disagree with you. The proposal from MTN is anything but good, it is to me a very bad proposal that should be rejected because take for instance the following proposals to:
      1. Invest N80bn in Nigerian sovereign debt instruments in 2016-2017;
      This effectively makes MTN a creditor/money lender to Nigeria to the tune of N80bn. How else can you take a nation for a ride if this is not one.

      2. The provision of N70bn worth of broadband access to the FG (subject to excess capacity on MTN’s fibre network) for its e-initiatives;
      Again this proposal to say the least is an insult to Nigeria. Every Accountant knows that a firm loses nothing when it trades idle capacity for anything, in this case MTN wants to use idle capacity to swindle Nigeria of N70bn that it ought to pay as fine.
      Nigeria should insist on the payment of the fines. If and when Nigeria floats the Euro bond MTN can like other investors subscribe if it wants to. On the broadband proposal Nigeria should not accept such insulting offer. Rather, govt. should just go ahead with the development of the necessary capacities and capabilities for its’ e-initiatives.

      • Daniel

        I have decided not to over-flog this issue. Buhari has a deal on his table. What deal did Jonathan have on his table? They would have quietly collected bribe as usual and you would never have known anything about this deal.

        MTN must not be seen as an enemy because they hire lots of Nigerians at different levels. And those Nigerians support their families and pay taxes. Despite GLO being an indigenous telecoms company, they are not as technologically robust as MTN.

        Take it or leave it.

  • Azubuike Anene

    THIS “NEGOTIATION” IS THE MOTHER OF ALL FRAUDS.
    MALAMI AND IDRIS NEED TO BE SACKED IMMEDIATELY FOR THIS RECKLESSNESS,ABUSE OF OFFICIAL PROCESSES AND CRIMINAL CONSPIRACY.
    AND HOW ON GOD’S EARTH DO YOU DEFINE A “RECOVERY ACCOUNT” @ CBN? WHY WAS IT NOT PAID INTO NCC OR FEDERATION ACCOUNT? WHY OPEN A NEW ACCOUNT,IN THIS REGIME OF TREASURY SINGLE ACCOUNT?
    PLEASE THE SENATE COMMITTEE SHOULD CLOSE THAT ACCOUNT,IMMEDIATELY,TRANSFER THE DEPOSITED N50BILLION OF “GOOD FAITH”?
    IF NOT,THE N50B AND THE SUBSEQUENT N300B (?) (IS IT NOT N780B OR N1.04 TRILLION) WILL SUFFER THE IBRAHIM LAMORDE EFFECT-VANISH!
    WE COMMEND THE SENATE COMMITTEE COMMUNICATIONS FOR THIS VIGILANCE.
    IF THEY HAD ASKED OR TAKEN A PERCENTAGE,WE WILL NOT KNOW THESE GORY DETAILS.
    THE CRIMINAL CONSPIRACY IS ON THE DIFFERENCE BETWEEN N1.04 TRILLION,N780B AND N300B.
    MALAMI AND IDRIS WILL POCKET THIS DIFFERENCE AND STILL ” CONTROL” THE DUBIOUS CBN “RECOVERY ACCOUNT”
    WHAT A COUNTRY?

  • Fula

    aLL THIS GRA GRA FROM THE NASS IS NOT ABOUT NIGERIA O. THEY WANT TO GATE CRASH THE NEGOTIATION SO THEIR OWN INTEREST CAN BE CONSIDERED. WETIN CONCENR NASS IN THE MATTER SEF?

  • chyke

    The last offer of N70b broadband offer is utter rubbish. Why does it seem we are negotiating from a position of weakness instead of otherwise. This subjective offer is subject to broad band availability. What if it wasn’t available, the fine automatically reverts to N230b. Instead let MTN float its shares and give N70b worth of it to its long suffering subscribers. I think that’s a better proposition.