Senate C’ttee Rejects MTN, NCC Deal, Summons Telecoms CEO, AGF, Emefiele, Others

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Case closed on fine, says communications minister

By Omololu Ogunmade in Abuja and Ademola Babalola in Ibadan

The Senate Committee on Communications at the weekend rejected the recent terms of agreement between the Nigeria Communications Commission (NCC) and MTN which reduced the fine imposed on MTN by NCC for operational misconducts last year from N780 billion to N330 billion.

Consequently, the committee summoned the Attorney-General of the Federation (AGF) and Minister of Justice, Abubakar Malami;  Minister of Communications, Adebayo Shittu; Executive Vice Chairman of NCC, Professor Umar Dambatta; Accountant-General of the Federation, Ahmed Idris, Managing Director/Chief Executive Officer of MTN and the Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, to appear before the committee on June 23 to explain the rationale behind the deal.

NCC had imposed a fine of N1.04 trillion on MTN over its decision to keep over 5 million unregistered subscribers in its network last year in violation of NCC Act. However, after sustained pressure from MTN and external forces, NCC reduced the fine to N780 billion before finally reviewing it downward to N330 billion last week.

But the committee in its first official reaction to the decision, accused the NCC of short-changing Nigeria in the deal, describing it as a move “that is characterised with suspected criminal tendencies as they were perfected secretly particularly without recourse to due process.”

The committee Chairman, Senator Gilbert Nnaji, in a letter dated June 15, 2016, and separately addressed to all parties to the deal, condemned the manner in which the “settlement agreement of N330 billion was reached with MTN out of a whooping N1.04 trillion.”

An excerpt from the letter read: “As a committee and representatives of the Nigerian people, we are saddened about this development at a time when the Nigerian economy needs all the available capital infusion to bolster it. It is our strong opinion that Nigeria has been shortchanged in this whole process on account of the ridiculous settlement payment plan; coupled with the disparity in the exchange rate regime when the fine was imposed ab initio compared with the current prevailing exchange rate when it was agreed to cut the fine to N330 billion.”

It added that the committee was displeased and disappointed that “NCC could engage in such a negotiation that is tainted with a lot of questionable conclusions without the knowledge of the committee.”

The letter also read in part that: “The committee is worried about this development because it is on record that during our last investigative meeting with all the relevant parties to this matter on March 10, 2016, the committee was informed that the case was still in court and that it was adjourned till March 18.

“The committee was not aware of the outcome of the court case neither was it privy to any active negotiation that led to the fine being reduced to N330 billion. It is our concern that Nigeria has been shortchanged in this whole process on account of the ridiculous settlement payment plan; coupled with the fact that parties involved in the negotiation were either oblivious of the exchange rate value of the naira to the dollar when the sanction was meted originally compared to current exchange rate regime when the value of the naira is now on the downward slide.

“Consequently, you are hereby invited to appear before the committee on June 23, 2016 at 2p.m. prompt in Room 221, Senate New Building, to shed more light on the issues surrounding the settlement. You are requested to furnish the committee with the following information to guide it in its deliberation: document(s) detailing presidential directive to accede that MTN should pay N330 billion to the Nigerian government as contained in paragraph 1 of your letter.”

The committee therefore asked the invited officers to come up with document(s) specifying evidence of negotiation including terms of negotiation; parties to the negotiation; modalities for arriving at N330 billion; minutes of negotiation meeting and other relevant information; relevant section(s) of the NCC Act 2003 which empower NCC to impose fines accompanied with sections empowering the commission to reduce fines; detailed reason(s) for the reduction of the fine from N1.04 trillion to N780 billion and later to N330 billion.

Other items the committee wants them to produce are detailed information on the major role(s) being played by Accountant-General of the Federation in the entire negotiation and settlement process; a copy of the settlement agreement; evidence of participation of the Ministry of Communications and its major inputs at the negotiation meeting and evidence of out-of-court settlement between MTN and the federal government.

It specifically asked “the governor of CBN as the custodian of the CBN Recovery Account into which the initial N50 billion was lodged and as a principal player in the whole process,” to present to the committee, the current position of the recovery account.

Meanwhile, the Minister of Communications, Shittu, has said the reduction of the N1.03trillion fine earlier imposed on MTN to about N300billion was in the interest of the investment drive agenda of the federal government.

To this end, Shittu said the ‘case is closed’ on the much-talked issue, stressing that the need to encourage foreign investment in the country remains the main reason for the federal government’s review of the said fine imposed on the company by the NCC.

The minister spoke to journalists in Ibadan at the weekend at the venue of an Achiever’s Award ceremony in honour of Senator Lekan Balogun, the Otun Olubadan of Ibadanland.

For failing to meet the deadline fixed by the NCC to disconnect the subscribers not properly registered, the MTN was fined $1,000 per each of its affected 5.2 million subscribers, totaling $5.2 billion.

But due to pressure from different quarters, the federal government recently agreed to reduce it to N300 billion, which would be paid within the period of three years.

According to Shittu, the Federal Executive Council (FEC) decided to relax the penalty against the telecommunications giant after realising the negative impact the burden could have on the nation, its people and the economy.

“As far as we are concerned, the MTN issue is a closed matter. The FEC has remitted substantial part of the penalty to them. Nigeria as a country must move on. We must not do anything to drive away foreign investors. Foreign investments are potent means of bringing about development and wealth creation.

“Again, we must not forget that before MTN and other telecoms operators came on board, Nigeria had only less than 500,000 telephone lines. Today, because of their involvement, Nigeria now has more than 152 million lines and MTN is the dominant operator in the field. It controls almost 50 per cent of the lines. Though they (MTN) have violated the law and we have put in the necessary penalty, we must put a halt to the limitless crisis so that we don’t discourage foreign investors. That is what the executive has done to ensure we move ahead.

“We know for instance that MTN operates in 22 countries. And that what they make in Nigeria alone is more than what they make in other 21 countries put together,” he said.

Shittu also advised the telecoms operators against taking Nigeria and their customers for granted, warning that all infractions would be appropriately sanctioned.

“The operators owe a duty to Nigerians to continue to improve on their services. Nigerians have been paying through thick and thin to enjoy and patronise them. To whom much is given, much is expected,” the minister submitted.