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MTN heads to court over N1.04 trn fine

It appears MTN Nigeria has finally concluded it would not pay the N1.04 trn fine, the Nigerian Communications Commission, NCC imposed on it, for allegedly unable to disengage about 5.1 million Improperly registered subscribers on its network in August and September 2015.
Not even the reduction of the fine to N780 billion last week by the commission, could sway the telecommunications company.
Reasons, according to the company, were that “the manner of the imposition of the fine and the quantum thereof is not in accordance with the NCC’s powers under the Nigerian Communications Act and therefore there are valid grounds upon which to challenge the fine”
It also announced readiness to sue the commission, seeking appropriate reliefs. “Accordingly, MTN has followed due process and has instructed its lawyers to proceed with an action in the Federal High Court in Lagos seeking the appropriate reliefs”.
In reaction to the new development, an impeccable source at NCC said the commission would not react on a mere statement a company issued to its shareholders.
The source said that it would be a shock if MTN after writing to the commission , admitting guilt and asking for leniency would turn back to threaten court action after getting the leniency. He said the commission would know that the telecommunications company meant business when it serves the commission with a writ of summons.

Addressing its shareholders yesterday, MTN said that “all factors having a bearing on the matter have been thoroughly and carefully considered including a review of the circumstances leading to the fine and the subsequent letters received from the Nigerian Communications Commission (NCC).
“MTN Nigeria acting on legal advice has resolved that the manner of the imposition of the fine and the quantum thereof is not in accordance with the NCC’s powers under the Nigerian Communications Act and therefore there are valid grounds upon which to challenge the fine”.
It said that “accordingly MTN has followed due process and has instructed its lawyers to proceed with an action in the Federal High Court in Lagos seeking the appropriate reliefs” adding that “MTN is advised that in the current circumstances in line with the lis pendens rule (pending legal action) the parties are enjoined to restrain from taking further action until the matter is finally determined.This is consistent with previous judicial decisions in Nigeria”.
The telecommunications company said that notwithstanding this action, the Company will continue to engage with the Nigerian Authorities to try and ensure an amicable resolution in the best interests of the Company, its stakeholders and the Nigerian Authorities
Meanwhile, this MTN’s latest statement has attracted several reactions from stakeholders in the industry. While some agreed that MTN reserved the right to seek court interpretation to the issue, others warned of the consequences taking the matter to court might bring to both the company, the sector and the country at large. Particularly with the level of impact the sector has on foreign direct investment and the country’s GDP.
Chairman of the Association of Licensed Telecommunications Operators in Nigeria, ALTON, Engr Gbenga Adebayo, said that although MTN has the right to seek court action as a company, over matters that were not clear to it, the implication of taking the matter to court is that investors who would have ordinarily strolled into the country to do business would have to wait to see the outcome of the case before doing so.
“I hope this matter would be resolved amicably for the interest of all and the sector. No foreign investor would want to come to the sector now if the matter is in court until they see the direction of the resolution. That is an implication that may also tell on the contribution of the sector to the GDP” he added.
Also president of Teledom Group, Dr Emmanuel Ekuwem added that, taking the matter to court may be a business decision following the nature of Nigeria’s judicial system. “Anything is possible. It may be a business decision, considering that before the case would go through all the levels to Supreme Court, it may have taken five years, of which they may have recouped a lot of gains to pay the fine. But if the court finds out there was an infraction and that the fine by NCC was in the right direction, MTN should know that it would not only pay the fine but also compensations. All these would also impact the sector in one way or the other. So amicable resolution would
“Also in his own reaction, President of Association of Telecom Companies of Nigeria, ATCON, Engr Lanre Ajayi said that going to court to seek clarification, was a right no one should fault MTN on, if all other options have been exhausted. He however said that he did not believe that it would impact the sector negatively in any way.
The Nigerian Communications Commission, NCC, last week reduced the N1.04 trillion fine it imposed on MTN Nigeria to N780 billion.
However, the commission also mandated the telecom operator to pay the fine on or before December 31 2015.
The fine imposed on the telecom operator was owing to what NCC described as MTN’s inability to disconnect about 5.1 million Nigerian subscribers improperly registered on its network, after several warnings in August and September 2015.
In reaction, MTN had said that it would carefully study the new development and would mandate its Executive Chairman Phuthuma Nhleko to immediately and urgently re-engage with the Nigerian Authorities before responding formally.
The reduction which represents a 25 percent slash, was adjudged to have provided MTN with a reprieve, after series of meetings which saw several officials from South Africa thronging the country to negotiate the fine.

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