MTN has reportedly hired former US attorney general Eric Holder, a lawyer at Covington & Burling, to help negotiate down a US$3.9bn fine levelled by Nigerian regulators. Holder has a track record of achieving corporate settlements on behalf of JP Morgan and BP.
MTN (JSE:MTN) has reportedly hired former US attorney general Eric Holder, a lawyer at Covington & Burling, to help negotiate down a US$3.9bn fine levelled by Nigerian regulators.
Holder (pictured), who has won record corporate settlements on behalf of JP Morgan and BP, met with Nigerian officials in Abuja in January, reported the Financial Times. The final decision on the fine – a punishment for failing to switch off unregistered SIM card holders – will be made by Nigerian President Muhammadu Buhari, who was elected last year on an anti-corruption programme.
Neither MTN nor Covington & Burley was immediately available for comment.
The original US$5.2bn fine, which prompted a complete management overhaul at group and country level, was successfully negotiated down to the current US$3.9bn by former CEO Phuthuma Nhleko, parachuted in as executive chairman in November. MTN has until 18 March to reach an out of court agreement, Nigeria’s federal high court ruled in late January.
In 2013, the West African country introduced a law requiring telcos to cut off unregistered users to stem illegal activity by the likes of militant group Boko Haram.
NCC officials have reportedly said their intention is not to “kill” MTN, which in Nigeria reaped revenues of N824.8bn (US$4.1bn) in FY 2014.
Globacom, Etisalat and Airtel were also fined for non-compliance, but eventually switched off unregistered users by the end of August.
MTN, noted one source with knowledge of the local market, “has a history of not following the NCC’s rules”.
According to NCC data as of September 2015, MTN has 62.5 million subscribers, Bharti, which trades as Airtel, has 31.1 million and Etisalat, which trades as EMTS, has 23.5 million, while Globacom has 31.3 million.
MTN’s next largest markets are Iran and South Africa, where it has 44 million and 29 million customers respectively. It has a total 231 customers across its 21 markets.
The company last year managed to renew and extend its spectrum in the 900MHz and 1800MHz bands, now valid until 2021.