Ex MTN Staff Asks Court to Compel Firm to Deposit $13.2m Judgment Debt, Pending Determination of Appeal

Wale Igbintade 

A former expatriate staff of the MTN Group, Mr. Paul Odunewu, has asked the Court of Appeal, Lagos Division to compel the telecommunications giant MTN,  to deposit with  the Court the sum of $13,144,512.00 judgement debt and accrued interests as ordered by the National Industrial Court Nigeria (NICN), Akure Division.

Odunewu stated this in his further-reply-affidavit and written address dated December 28, 2023, filed before the Court in support of his application

In a judgement delivered by the lower  court on September 17, 2017, the Court had found that termination of the employment of the former Network Group Operations Manager on February 28, 2006, was wrongful and malicious; and had ordered the company to pay Mr. Odunewu’s entitlements including share options valued at           $13,144,512.00. 

Dissatisfied, MTN through ite external Counsel,  Professor G Elias & Co. appealed against the judgement vide a notice of appeal containing two grounds alleging that the trial Court breached their fundamental right to fair hearing.

MTN also filed a Motion for Stay of Execution of the judgement, but Mr. Odunewu’s Counsel, Prof A. B. Kasunmu’s Chambers, opposed the Stay Motion on the ground that the initiating notice of appeal is not competent.

MTN Group Limited, South Africa (MTNG); MTN Nigeria (MTNN) and MTN International, Mauritius (MTNI) is the first, second, and third Appellant respectively, in this six-year-old appeal which had lasted more than 10 years from the Lagos State High Court to the NICN before judgement was delivered in September 2017.

In his application filed on  January 8,  2020, with appeal number CA/1346/2017, Mr. Odunewu’s grounds of the motion include assertions that the Notice of Appeal filed by MTN on September  29, 2017,  is incompetent and does not raise any substantial or recondite issues of law. 

He alleged that MTN has been facing huge fines from various Authorities in Nigeria for regulatory and tax infringements and the cumulative impact of these fines raises existential issues for MTN Nigeria and their ability to pay the judgement sum as due at the determination of the case. 

He further stated that, the Appellants (MTN) have not been prosecuting the appeal diligently and expeditiously.

Mr. Odunewu supported the motion with financial statements and press releases by MTN (among others). 

He stated “In 2019 MTN completed payment of ₦330 billion Nigerian Communication Commission (NCC) fine, and MTN Group had paid $100 million to Lawyers within six months to negotiate the NCC fine. MTN Nigeria reported preferential shares redemption as of December 30, 2019, at a total amount of ₦148.19 billion (or US$399.59 million) in favour of MTN Group.  

“This, consequently, reduced share capital of MTN Nigeria to ₦17.623 billion in 2019 compared to ₦65.145 billion in 2018.  On the 24th of December 2018, MTN announced payment of $52.6 Million as a “notional reversal” of $1.0 billion private placement in 2008 based on certificate that did not have final approval and thereby resolved the $8.1 billion dividend repatriation issue with Central Bank of Nigeria (CBN). 

“A Nigeria Senate Committee had investigated MTN for capital flight and had reported that a total capital inflow of $1.24 Billion was injected for MTN operations in Nigeria for the period 2001 – 2016 whereas MTN Nigeria repatriated $13.92 billion from 2006 to 2016 in the guise of dividends/profit, repayment of loans and licenses/management fee.  This meant that MTN, as of 2016, were repatriating US$11.00 for every US$1.00 that they injected into their business in Nigeria.

In a Reply-Affidavit dated February 4,  2022, one Temitayo Adeniyi, a Lawyer at Prof A. B. Kasunmu’s Chambers, deposed that MTN “substituted payment of the fines and associated costs with huge debt and are, therefore, running their operations in Nigeria with riskier financial structure than 2014 (before the 2015 NCC fine).” 

“In the current Nigerian climate of stronger regulatory oversight, MTN Group redeemed its preference shares and thereby reduced their exposure in Nigeria but created significant financial and economic risk to boost shareholder returns with much higher leverage in 2019 than 2018”. 

He added that  MTN “have not prosecuted the appeal expeditiously but instead they have been prevaricating to regularize the initiating Notice of Appeal dated 29th September 2017 thereby causing enormous delay to the determination of this Appeal.

In a Further-Counter-Affidavit by MTN dated 18th February 2022, one Athanasius Akor, a Lawyer at G. Elias & Co, deposed: “the fact that there is an appeal against the judgement and a pending application for stay of execution are an exercise of the constitutional rights of the appellants”. 

He deposed that MTN “is not dissipating and is not repatriating its assets out of Nigeria”; and that MTN “conducted an offer for sale of its share on the Nigerian Stock Exchange (NGX) which is a testament of its long term believe and its intention to remain as an active participant in the Nigerian economy.”  

He further deposed that the 2015 fine has been fully paid since May 2019 and that MTN Nigeria has been making profit and declaring dividends. Mr. Akor deposed that share price of MTN Nigeria jumped to ₦199.8 per share on 17th February 2022. 

He further deposed that Mr. Odunewu based his analyses on the MTN Nigeria 2018 Audited Account and not the latest 2021 Audited Financial Statement in which MTN Nigeria declared a revenue of circa ₦1.7 Trillion and a profit of circa ₦286 billion.  

Also “the Respondents has no financial issues that will prevent them from meeting their financial obligations or paying the judgement debt and accrued interest in the event that the appeal is determined in favour of the Applicant and against the Respondents”.

The trial Court had found that MTN Group is the Parent Company and the life wire of both MTNN and MTNI that controls them and thus integral part of the both companies. Also, MTNN has no power of its own to act under its contractual agreement with Mr. Odunewu except as approved by its Parent Company, MTN Group. 

The trial Court had ordered that the judgement sums of $13.47 million, ₦2.54 million, and £10 thousand be paid by the second and third defendants (MTNN & MTNI), “except the issue of costs which is to be paid by all the defendants (MTN sic)”. 

The trial judge had ordered MTN to make the payments within 30 days, failing which the sums would appreciate at 21 percent interest per annum.

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