17/03/2016

N1.04trn fine: Senate raises alarm over plot to free MTN

N1.04trn fine: Senate raises alarm over plot to free MTN
Last week, the senate committee on communication organized a public hearing to review the progress made by the Nigeria Communication Commission,NCC regarding the implementation of the N1.04 trillion fine originally imposed on the South African telecommunication giant, MTN for the violation of the
commission’s rules regarding SIM card registration. To say the least, there were startling revelations from that public inquest. The event, which took place at one of the hearing rooms of the senate had in attendance, the Minister of Communication, Mr. Adebayo Shittu, the Executive Vice Chairman of NCC, Professor Umaru Dambatta, Chief Executive Officer of MTN Nigeria, Ferdinand Moolman, Mr. Dayo Apata, representative of the Attorney General and Minister of Justice, Danladi Malami, Acting Director of Banking and Payment Systems Department of the Central Bank of Nigeria, CBN, and the Accountant General of the Federation, Ahmed Idris.
It came to the fore at the public inquest that MTN has continued to throw its weight around government circles as well as trying to influence Nigerian Government officials to circumvent the payment of the fine and almost succeeding. Before delving into the full gist of the matter, it is important to recall here that the NCC under the new leadership of Professor Dambatta had last October slammed a fine of N1.04 trillion against MTN for continuing to retain 5.2 million unregistered subscribers on its network after the expiration of a warning grace period. The figure was arrived at by multiplying 5.2 by N200, which is the fine for retaining each unregistered subscriber on the network. However, after series of pleas for leniency and interventions from several quarters, the fine was reduced to N780 billion, while the network provider was given up to December 31, 2015 to pay up the fine.
The reduction of the fine was arrived at by an inter-agency committee set up by President Muhammadu Buhari following a public apology by MTN. To the chagrin of many Nigerians, despite the reduction of the fine, before the expiration of the December 31, 2015 deadline, MTN sued the Federal Government, challenging Government and NCC’s powers to impose the fine in the first place. However, before the trial of the matter could proceed any further and apparently as part of new conditions to pave the way for an out-of-court settlement of the matter, last month, MTN withdrew the suit and paid N50 billion into Government coffers, supposedly as a sign of good gesture towards the settlement of the fine. It was on the basis of that, that according to media reports, MTN and the Federal began a negotiation for the settlement of the matter. While the Federal Government team was led by Nigeria’s Attorney General and Minister of Justice, that of MTN was spearheaded by the former US Attorney General, Mr. Eric Holder.
Details of what has so far transpired in the implementation of the fine came to the fore at the last public investigation of the matter at the senate. At the event, the Vice Chairman of the Senate Committee on Communication, Senator Adeola Olamilekan (Lagos West) came with a document from the office of the Solicitor- General of the Federation, which detailed the commitment of MTN towards the settlement of the fine. Surprisingly, the document showed that MTN committed that it will pay only N300 billion.
A breakdown of the payment showed that apart from the N50 billion already paid by the network provider into a recovery account of the CBN, MTN committed that it would pay another N100 via electronic transfers between December 31, 2016 and December 31 2020. The proposal also includes another N80 billion proposed payment by MTN as a demonstration of its commitment to and confidence in the Nigerian economy, which would be subject to necessary regulatory approvals.
This would come by way if MTN Nigeria committing to purchase N80 billion of Nigeria’s sovereign debt issued on the international market in 2016-2017. Finally, MTN proposed to pay N70 billion through the provision of broadband access to the Federal Government of Nigeria (subject to excess capacity on MTN’s fibre network) for the purchase of Government’s e-initiatives (e.g. visa processing, public service, connecting schools, registration etc.). Olamilekan made the point at the event that with such a document, it was clear that the Attorney General and Minister of Justice, Malami was deceiving Nigerians into believing that negotiation with MTN on the issue of the fine was still on-going, knowing that the Minister had concluded a criminal settlement terms that favours MTN to pay only N300 billion and clearly mortgaged the interest of Nigerians in the entire deal. Even though Apata who represented the AGF at the event argued that the document was just a proposal, which was still undergoing negotiations, Olamilekan insisted that Government had already concluded the deal with the network providers and was only deceiving Nigerians. He questioned the basis for the payment of the N50 billion by MTN to Government if negotiation was still open.
What was even more worrisome was that throughout all the negotiations, both the NCC and the Communication Minister were kept out of the deal by the presidency. Even the process that led to the reduction of the initial fine of N1.04 trillion to N708 billion did not in real terms involve the two public officers. Indeed, the Minister was very emphatic during the public hearing that he was only invited to a meeting of an inter-agency committee set up by President Muhammadu Buhari, which approved a 25 per cent reduction of the N1.04 trillion initial fine following the President’s approval after MTN wrote an apology letter to Government. Also, at the public hearing last week, both the Minister and Dambatta distanced themselves from the negotiation, which led to the payment of N50 billion by the MTN.
Both were emphatic that the deal was done between Malami and MTN, including the decision to pay the said sum into a CBN recovery account on February 24. According to the two public officers, since MTN took Government to court over the fine, both the Minister and NCC were kept in the dark over the issue, insisting that it was only Malami who single-handedly proposed the out-of-court settlement terms. Another issue that raised serious concerns to the lawmakers regarding the entire deal was the decision to open a recovery account with the CBN. When the senators asked why MTN was asked to pay the said N50 billion into a CBN account and not the NCC account, Apata who represented Malami at the parley denied knowledge of the directive. But commenting on the issue, the Accountant General of the Federation while dissociating himself or his office from the negotiations explained that he only got involved in the matter when Malami asked him to facilitate the opening of an assets recovery account with the CBN. When the lawmakers raised issues about the legality of the account, Apata who represented the AGF said he was not in a position to say whether it was legal or not. The lawmakers did not fail to conceal their disfavor with the action of AGF who, all through the negotiations with MTN on the issue of the fine, failed to take other critical stakeholders like the NCC and the Communication Minister along. Indeed, Senator Abiodun Olujinmi (Ekiti South), a one time member of the board of NCC made the point that the imposition of fines on telecommunication companies by NCC was a regular norm and that such fines are usually paid into the NCC account for subsequent transfer into the Federation Account.
While describing the entire negotiation process for the fine as, “voodoo,” the lawmaker as well saw the opening of a recovery account for money that was not stolen as clandestine move to circumvent due process. This was also as Olujinmi queried the rationale behind the determination of the six per cent of the fine amounting to N50 billion paid by MTN. Incidentally also, while the senate was on the matter of the MTN’s fine last week, their colleagues from the House also deliberated on the same issue. But unlike the senators who could not reach any conclusions on the issue before adjourning it sine die, the House members were so angry with the way the South African network operators have been throwing their weight around Nigerian Government officials that they resolved that MTN must be made to pay the entire N1.04 trillion initial fine.

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