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The ministry of communications and the Nigerian Communications Commission say they were sidelined by the ministry of justice in the negotiation to bring down the fine of N1.4 trillion imposed on MTN Nigeria for not deactivating unregistered lines
| By Anayo Ezugwu | Mar 21, 2016 @ 01:00 GMT |
THE decision of the ministry of justice to negotiate the fine the Nigerian Communications Commission, NCC, imposed on the MTN Nigeria may cause rift between the ministry and its communications counterpart. The NCC had imposed a fine of N300 billion on MTN for breaching the deadline for deactivating unregistered lines in the country. The justice ministry without involving NCC and its parent ministry of communications brought the amount to N780 billion from N300 billion. Adebayo Shittu, minister of communications and Umar Dambatta, executive vice chairman, NCC, at the National Assembly on Thursday, March 10, accused Abubakar Malami, attorney general of the federation and minister of justice, of sidelining them in the negotiations with MTN on the fine.
Shittu told the Senate Committee on Communications on that he was not part of the entire negotiation process. He maintained that the matter was between Malami and MTN. According to him, since the matter went to court, his ministry and the NCC had virtually been kept at arm’s length on the matter.
He added that when MTN indicated its decision to settle the matter out-of-court, the AGF gave it two conditions for the out-of-court-settlement. He listed the conditions to include making a down payment of six percent of the total fine, amounting to N50 billion first, and withdrawal of the suit, both conditions which he said MTN fulfilled.
In his submission, Danbatta said NCC was not responsible for the reduction of the fine from N1.04 trillion to N780 billion, saying it was only invited to a meeting of an inter-agency committee set up by President Muhammadu Buhari. He said the committee reduced the fine by 25 percent following the president’s approval after MTN wrote a letter of apology to the government.
He disclosed that the fine of N1.04 trillion imposed on MTN by NCC was predicated on a charge of N200 per line that was not registered by the company, in line with its directive at the time. According to him, based on a letter of apology written by MTN and its remission, Buhari gave approval to the committee to reduce the fine by N25 percent, thus bringing it down to N780 billion. He also said that NCC was not informed about the move to settle the case out of court neither, nor was it a party to the payment of N50 billion to the Central Bank of Nigeria, CBN.
Both Shittu and Danbatta said they were not aware of negotiations between Malami and MTN that led to the payment of N50 billion by the latter into the CBN recovery account on February 24.
But Dayo Apata, representative of the AGF, who told the committee that Malami was unavoidably absent due to a trip out of the country, said the document is an ordinary proposal which was not an end in itself but a means to an end. He said on January 22, while in court, MTN had indicated its interest in settling the matter out of court and after being told to do so in “good faith”, by meeting the two conditions, it requested for a long adjournment, which he said was granted by the court.
He said it was these actions that led to the adjournment of the case to March 18, by the court. When asked why MTN was asked to pay the money into a CBN account and not the NCC account, Apata said he did not know.
On his part, Ferdinand Moolman, chief executive officer, MTN, explained that the process leading to the payment of N50 billion began when it made its intention to settle out-of-court known to the AGF. According to MTN’s chief executive, who echoed the communications minister’s submission, the AGF had informed them that the federal government’s interest in the matter would be dependent on MTN’s preparedness to fulfil the two conditions enumerated by AGF, which he said MTN fulfilled.
Senator Adeola Olamilekan vice chairman of the committee accused the AGF of deceiving Nigerians that negotiations were still ongoing with MTN, whereas he had already executed an agreement with MTN that will allow the company pay the proposed N300 billion in four years. He insisted that the government was only playing on Nigeria’s intelligence and questioned the rationale behind the acceptance of N50 billion from MTN, which was the first tranche of the payment as contained in the proposal, and yet claiming that negotiations were still ongoing.
However, the outcome and remarks made during the meeting of the Senate Committee reflected a similar outcome at a meeting of the House of Representatives Committee on Communications on Wednesday, March 9, during which the committee insisted that MTN must pay the entire N1.04 trillion penalty, instead of the reduced fine of N780 billion.
MTN in a proposal acknowledged by Taiwo Abiodun, Solicitor General of the Federation, insisted that it could only pay N300 billion. A breakdown of the proposal which was forwarded to the ministers of communications and finance by the solicitor general as well as NCC include the N50 billion already paid by MTN into a recovery account of the Central Bank of Nigeria, CBN, and another N100 billion to be paid via electronic transfer 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 and will be subject to necessary regulatory approvals, This would come by way of MTN Nigeria committing to purchase N80 billion of Nigerian sovereign debt issued on the international market in 2016-2017.
The last tranche of N70 billion which the network provider proposed will be through the provision of broadband access to the Federal Government of Nigeria (subject to excess capacity on the company’s fibre network) for the purpose of the government’s e-initiatives (e.g. visa processing, public service, connecting schools, registration, etc.). If accepted, the broadband access valued at N70 billion will commence from the date of the execution of the agreement between the federal government and MTN to December 31, 2020.
The NCC had in October 2015, imposed a fine of N1.04 trillion on MTN for failing to disconnect 5.2 million unregistered subscribers on its network, but later reduced it to N780 billion and gave the network provider till December 31, 2015, to pay up after it had appealed for leniency.
But before the deadline, MTN sued the federal government challenging the power of the federal government and NCC to impose the fine. Last month, it withdrew the case and paid N50 billion as a gesture of good faith towards the settlement of the fine.
With the latest developments on the N780 billion fine imposed on MTN, it’s obvious that the two-day working visit of President Jacob Zuma of South Africa to Nigeria has achieved its purpose of cowing Nigerian government into reducing the fine.
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