The MTN Group, which is South Africa’s largest mobile telecommunications company, has reportedly resolved an ongoing dispute with Nigeria’s central bank over $8.13 billion (6.96 billion euros) which the bank claims the company illegally transferred out of the country to South Africa.
In order to settle the dispute, MTN has paid $52.6 million (R770 million) over dividend payments made to shareholders.
“MTN resolves Nigeria dividend issue, makes $53m payment, engaging with banks regarding the agreement,” the mobile telecommunications company announced on Twitter, reported Reuters.
The Central Bank of Nigeria (CBN) had said $8.1 billion in dividends paid by MTN Nigeria to its parent company between 2007 and 2015 and sent back to South Africa were illegal and should be returned. The bank claimed the South African company had not obtained approval before transferring the funds. MTN continuously denied any wrongdoing.
The dispute between the two entities forced MTN’s shares to fall drastically.
The CBN said in a statement released late on Monday that the telecoms group had provided additional information and documents at the meetings held throughout November 2018, satisfactorily clarifying its remittances. As per the statement, the settlement agreement signed between the two parties will resolve all court cases pertaining to the matter.
“The parties have resolved that execution of the terms of the agreement will lead to amicable disposal of the pending legal suit between the parties and final resolution of the matter,” Isaac Okorafor, the Director, Corporate Communications, CBN, said in a statement.
MTN, which began its operations in Nigeria 17 years ago, had been under the scanner in a number of cases since last few years. Around two years ago the mobile telecommunications company agreed to pay more than $1 billion to settle a dispute over SIM cards in Nigeria. In a separate case, MTN faces a $2 billion tax demand from Nigeria’s attorney general.