Executive Chairman, MTN Group, South Africa, Phuthuma Nhleko, said on Thursday that the company has set aside N118.8 billion (about $600 million) to cover a potential settlement of the fine imposed on its Nigerian subsidiary by the industry regulator, according to Thisday.
It signalled that Africa’s largest mobile-phone company was confident the N780 billion penalty imposed on MTN Nigeria by the Nigerian Communications Commission (NCC) may be reduced. The provision, which includes a N50 billion ($251 million) installment paid last week, accounts for about 15 per cent of the total fine.
Nhleko also said the company may list its Nigerian unit on the Nigerian Stock Exchange (NSE), reported Reuters.
Nhleko said in Johannesburg when announcing the company’s 2015 results that the listing would take place in Lagos once the company resolves the disputed fine with the Nigerian government.
The fine was imposed by the NCC last October after MTN Nigeria failed to disconnect 5.2 million unregistered subscribers on its network.
The company was initially fined N1.04 trillion but was reduced to N780 billion after appealing to the Nigerian government for leniency.
It was given till December 31, 2015 to pay the fine but instead sued the federal government challenging the fine. The case was withdrawn last week when it also paid the N50 billion as a mark of good faith towards a negotiated settlement of the fine.
Commenting on the provision, Nhleko said: “MTN’s auditors have required that the company make a provision in line with the International Financial Reporting Standards (IFRS). Discussions with the Nigerian authorities continue on the matter.”
The management of MTN Nigeria, however, clarifed that the $600 million set aside in the financial results was in accordance with the principle of prudence in generally accepted accounting standards. This requires that reasonable provisions be made for contingent liabilities.
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