Government fails to get MTN's Nigerian accounts frozen to avoid it moving funds abroad

GOVERNMENT plans to freeze the accounts of telecommunications giant MTN and prevent it from moving its funds outside Nigeria have failed after a high court refused to grant an application of mareva injunction filed by the justice ministry.

 

Since October last year, MTN and the Nigerian government have been involved in a bitter spat after the company was fined N1.04tn ($5.2bn) by the Nigerian Communications Commission (NCC) for non-compliance with a deadline to disconnect all non-registered Sim cards. Unhappy with the development, MTN is said to be considering pulling all its funds out of Nigeria.

 

In an attempt to prevent, this, Nigeria's attorney-general and justice minister Abubakar Malami had dragged NTN to court, asking that it be prevented from moving funds out of its accounts in any of Nigeria's 21 commercial banks. However, yesterday, the Federal High Court in Lagos refused to grant the government an injunction to that effect.

 

Presiding judge, Justice Mohammed Idris, held that the federal government failed to place enough material before the court to prove that MTN was about to empty its bank accounts and move its funds out of the country. In an affidavit attached to the application, the government had expressed fears that MTN could move all its funds out of the country before the N1.04tn fine could be enforced.

 

In the 14-paragraph affidavit deposed by Dipo Okpeseyi, counsel to the federal government, it was alleged that MTN was in the habit of regularly repatriating its funds out of Nigeria. Mr Okpeseyi claimed that between October 2007 and May 2009, a period of 19 months, MTN moved over $7.7bn of the money it made in Nigeria to a foreign account.

 

He also told the court that on February 8, 2008, MTN transferred over $936m out of Nigeria to accounts in Mauritius, Cayman Island and British Virgin Island. In addition, Mr Okpeseyi insisted that MTN was under an obligation to pay the N1.04tn fine, because it was NCC’s administrative decision, which remained final unless it was reviewed by the commission or nullified by the court.

 

Mr Okpeseyi said: “Unless this honourable court urgently entertains this application, the plaintiff/respondent would move its funds out of Nigeria and thereby frustrate the enforcement of the fine in the likely event that this honourable court sanctions the imposition of the fine.”

 

He also submitted that though the NCC, the government had given MTN a concession on the fine and reduced it to $3.9bn but since the company had neglected or failed to pay on or before December 31, 2015, the fine remained N1.04tn. According to Mr Okpeseyi, instead of taking advantage of the concession, MTN resorted to filing a suit in order to buy time, with the hope that it could move all its funds out of Nigeria before the case would be decided.