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Thursday, Oct 18th

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MTN's Nigeria crisis deepens

MTN's Nigeria crisis deepens

MTN has dismissed claims by Nigeria's Attorney General that it owes US$2 billion in tax accumulated over a ten-year period. The taxes are understood to be for the importation of foreign equipment and payments made to foreign suppliers.

Soon after recent news that the operator was at loggerheads with authorities over US$8.1 billion that the operator allegedly and illegally repatriated out of Nigeria, officials have now slapped the company with a tax bill.

MTN has issued a statement refuting the latest claim and said it has paid approximately US$700 million to the Nigerian government over the period in question.

MTN Nigeria's Public Relations Manager Funso Aina said: "MTN continues to strenuously deny the allegations being made by the Central Bank of Nigeria and has provided further clarity on the company's position. MTN equally strenuously rejects the findings of the Attorney General's investigation and believes it has fully settled all amounts (it was) owing under the taxes in question.

"It is both regrettable and disconcerting that despite the historic engagements with the Nigerian authorities by MTN Nigeria, the senate investigation into the CCI matter, and the multiple tax assessments done by the Nigerian tax authorities over many years that were satisfactorily concluded, these matters are being reopened."

However, Ladidi Mohammed, head of asset recovery at the office of Nigeria's Attorney General, confirmed a whistleblower had approached the Office with information on MTN's alleged infraction.

In addition to the impact on MTN's stock price, industry experts have also expressed concern over the potential impact the situation could have on the company's operations outside of Nigeria.

"Traders in Nigeria say some of their clients who invested in the MTN Ghana IPO are watching today's listing (of MTN Ghana on Ghana Stock Exchange) very carefully after all the negative news in the last few days about MTN Nigeria, fearing a sell off," said Wole Famurewa, Markets Editor (West Africa) at CNBC Africa.

Nigeria alone accounts for about one-third of MTN's annual core profit (EBITDA).

According to MTN Group CEO Rob Shuter advisors and teams in Nigeria have been directed to continue "at full pace".

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