MTN Group Ltd’s plan to sell shares in its Nigerian unit this year is in jeopardy following allegations by the central bank that the South African company illegally moved almost $8.1bn out of the country, according to people familiar with the matter.
While the listing process is far advanced there needs to be regulatory certainty for it to go ahead, said the people, who asked not to be identified as the information is private. That evaporated when Africa’s largest wireless carrier’s four banks were ordered late Wednesday to return the funds, causing MTN’s share price to plunge to nine-year lows.
The Nigerian telecommunications regulator wants the Lagos IPO to go ahead by May as part of the settlement of a separate dispute with MTN two years ago over unregistered SIM cards. The pledge helped enable the Johannesburg-based company to reduce the penalty related to that charge to about $1bn from more than $5bn, and MTN fears a failure to list before the deadline could lead the regulator to reimpose the higher amount, said two of the people.
“Our IPO has always been subject to satisfactory market conditions and this event will potentially make it complicated for us to make it happen,” MTN spokeswoman Mimi Kalinda said in e-mailed comments on Friday.
Nigeria is Africa’s most-populous country and MTN’s biggest market with 54mn customers, but disputes with lawmakers and regulators in the country have dogged the South African company in recent years. The latest allegations – which MTN refutes – come as Nigeria President Muhammadu Buhari seeks re-election for a new four-year term in a February vote. His administration has gone after companies for irregularities as well as tax-defaulters, part of a wider pledge to fight corruption.