South African telecoms group MTN will take immediate steps to list shares in Nigeria as part of a deal to settle a dispute over unregistered SIM cards and will also issue an apology, according to a copy of the agreement seen by Reuters.
The company said on Friday, after months of talks, that it had agreed to pay a fine of $1.7 billion in a settlement with the Nigerian government for failing to deactivate more than 5 million unregistered SIM cards. Nigeria, battling its worst economic crisis for decades, had agreed to cut the fine initially demanded by almost 70 percent after MTN threatened to shut down its operations in the West African nation, a Nigerian official said on Friday.
Under the agreement MTN will strengthen its presence in Africa‘s biggest economy by listing its local unit, a plan held up by the prolonged dispute, according to the copy of the agreement obtained by Reuters on Monday.
“MTN undertakes immediate steps to ensure the listing of its shares on the Nigerian Stock Exchange as soon as commercially and legal possible after the date of execution,” the agreement said. The South African mobile phone giant will also issue an apology to the Nigerian government and people within one month of the execution of the deal, the agreement said.
The group – which filed a lawsuit against the fine before opting for an out-of- court deal – will also cover its own legal costs, the agreement said. Nigeria has been cracking down on unregistered SIM cards, concerned they are used for criminal activity in a country fighting an insurgency by Islamist militant group Boko Haram.
The fine will be paid by MTN Nigeria over three years and is only around a third of the $5.2 billion figure initially demanded by the west African country last October. Nigeria’s House of Representatives was due to question the communications minister and a senior official from the regulator on Monday, but the hearing was delaying for one week, lawmakers said.
The lower house of parliament said on Friday it was surprised by the deal as its own probe into the MTN fine had not been concluded. In March, the lower house launched an investigation into whether reducing the initial fine of $5.2 billion would require changing the law. MTN is the largest mobile phone operator in Nigeria with 62 million subscribers and the west African nation accounts for about one third of its revenues. Africa‘s largest telecoms company has already paid 50 billion of the 330 billion naira owed. The rest will be paid in six instalments over three years, the company said. It set aside $600 million in March to pay the fine.