NSE Did Not Give MTN Waiver on Free Float, Says Onyema

Chief Executive Officer, Nigerian Stock Exchange (NSE), Mr. Oscar Onyema

• In this particular case, they met the standards  

• Telco beats FG’s deadline, pays N55bn final tranche to complete N330bn fine

By Obinna Chima and Emma Okonji 

The Chief Executive Officer of the Nigerian Stock Exchange (NSE), Mr. Oscar Onyema, yesterday clarified that MTN Nigeria Plc did not get any waiver on free-float ahead of its listing on the NSE.

On the same day, the telecoms firm confirmed that it had paid N55 billion to the federal government, being the last tranche of the N330 billion SIM card infraction fine imposed on it by the Nigerian Communications Commission (NCC).

There had been concerns over the free float accommodation and some other waivers MTN Nigeria was allegedly granted by the capital market regulators to pave the way for its listing.

This, THISDAY had reported, compelled the Securities and Exchange Commission (SEC) to launch an investigation into the process that led to the listing of the telco on the Nigerian bourse.

But providing insight into the matter, the NSE boss, who spoke on AriseTV’s “The Morning Show,” monitored in Lagos, clarified: “Have we granted exemptions before? Yes, we have and we have given a compliance plan to such companies to meet those standards. Again, the Exchange has the authority to grant such exemptions. But in this particular case, that waiver was not granted because they met the standards.”

With regards to the telco floating an Initial Public Offer (IPO), he reiterated that the company had publicly stated that it would do the IPO when market conditions are right and a few outstanding issues with the Attorney General’s office resolved, to allow it (MTN) to get proper market valuation.

“We don’t typically speak on behalf of companies. But this was what they presented to us. There are many ways you can list on the Exchange. You can do an IPO, you can do a listing by Introduction, a Reverse Mergers and Acquisition or you can do what we call deposit receipts.

“So, there are multiple ways and they are all avenues to bring people to list on the market,” Onyema explained.

Responding to a question on the visit to MTN’s head office by officials of the Economic and Financial Crimes Commission, Onyema said: “In the international market, it is very rare for and FBI to go and raid a company because there is some negative news in the press.

“So, we should wait for the result of the investigation and I am sure that the EFCC has its own operational modalities. I cannot talk about what triggered its own investigation, but I can only talk about ours.

“Ours is to make sure we have an orderly market, which we try to do using global standards. The NSE is a self-regulatory organisation that means we do frontline line regulation, pursuant to delegated authority from SEC, which has the statutory responsibility to make sure that you have a market place that works the way the law has said it will work.”

He added: “If there are criminal activities, the NSE and SEC don’t prosecute criminal activities. So, we have relationships with organisations that have those powers.

“For example, the stock exchange has an MoU with the EFCC. So, if there are cases that have criminal aspects, we would pass them on to the EFCC pursuant to our MoU.

“One of the reasons why we hold ourselves to high standards is because 52 per cent of market activities is international. So, it is about 47 per cent that is domestic in terms of market activities.

“So, it is very important that we view these things from the lenses of the national economy, the capital market and the impact they could have on millions of investors that participate in the market daily.”

Speaking about efforts to deepen the Nigerian stock market, Onyema said the management of the NSE was already in talks with several companies to encourage them to list on the stock market.

He, however, stressed the need for the right environment to allow businesses thrive in Nigeria.

Following the listing of MTN Nigeria Plc on the NSE about a fortnight ago, Airtel Africa a few days ago said it was also considering getting its shares listed on the Nigerian bourse.

But the NSE boss said his team had been engaging several other companies to get them listed.

Precisely, he said the NSE was already engaging the Pension Fund Administrators and other institutional fund managers for them to see the benefits of being listed on the stock market.

He stressed the need to channel more funds to the private sector so as to allow for a more inclusive economy.

MTN Pays N55bn Final Tranche to Complete N330bn Fine 

Meanwhile, MTN Nigeria has confirmed it had paid N55 billion to the federal government, being the last tranche of the N330 billion SIM card infraction fine imposed on it by the NCC.

The telecoms company, in a statement yesterday, said it paid the said amount to the Consolidated Revenue Account at the Central Bank of Nigeria (CBN) on May 24, ahead of the May 31 deadline given to it.

The Executive Commissioner, Stakeholder Management at NCC, Sunday Dare, also confirmed the payment to THISDAY last night.

In a statement issued by MTN yesterday, its Chief Corporate Relations Officer, Tobechukwu Okigbo, said the successful resolution of the fine was the outcome of active collaboration between the NCC and MTN.

“We are very pleased to have completed the payment of the N330 billon negotiated settlement with the NCC. We are particularly gratified to be in a position to have fully met the terms of the settlement within the agreed timeframes. I would like to thank the NCC for their constructive and collaborative approach to this issue, and believe that we emerge from it with a stronger relationship, focused on ensuring maximum value is delivered to our people, from a strong and growing telecoms sector,” Okigbo said.

NCC, last week, announced that MTN had been faithful in meeting up with the staggered payment arrangement, which was spread in six tranches to cover the negotiated N330 billion fines. It said that the telecoms company was left with the last tranche of N55 billion, and had until May 31 to complete the payment.

According to a statement from NCC last week, the payment arrangement was staggered for MTN and May 31, 2019 was the deadline for the telecoms company to pay the sixth and final tranche of N55 billion.

Specifically, MTN began with the payment of N30 billion into NCC’s Treasury Single Account (TSA) with the CBN 30 days from the date of the agreement, dated June 10 2016.

Subsequently, MTN paid N30 billion on March 31, 2017; N55 billion on March 31, 2018; N55 billion on December 31, 2018 and on March 31, it paid N55 billion, leaving it with a balance of N55 billion, which was meant to be paid on or before the May 31 deadline.

The NCC had on October 20, 2015, imposed a fine of N1.04 trillion on MTN for infraction of the provision of the NCC Telephone Subscribers Registration Regulations 2011; for failure to disconnect 5.2 million improperly-registered Subscriber Identification Modules (SIM) lines within the prescribed deadline, because these lines had economic activities on them without proper registration.

According to NCC, MTN and other telecoms operators were warned to correct all improperly registered SIM cards on their networks, and that failure to do so would attract a fine of N200,000 per SIM card infraction, which other telecoms operators adhered to except for MTN.

“Since MTN had 5.2 million improperly registered SIM card on its network as at the time we checked, which was after the deadline given to all telecoms operators, and each SIM infarction attracts a fine of N200,000, we discovered that the 5.2 million improperly registered cards on MTN network amounted to N1.04 trillion and we had no choice but to slam the fine on MTN,” the former Director, Public Affairs at NCC, Mr. Tony Ojobo, said in 2015 after the fine was imposed.

Shocked by the huge fine of N1.04 trillion, MTN Nigeria Communications Plc., went to court to challenge the powers of NCC to impose such huge fine on its business.

Few months later, MTN withdrew the case and entered into plea negotiations with the federal government and the NCC on how to reduce the N1.04 fine.

After several negotiations, the fine was reduced to N330 billion and spread across three years in six tranches to enable MTN pay the reduced fine.

According to NCC, the agreement to reduce the fine was reached by the parties involved in a way to avoid decisions likely to cripple the business interest of the operators that the NCC regulates.