CBN debit banks with $19m fines over MTN

The Central Bank of Nigeria (CBN) has
finally debited four commercial banks to the tune of $19 million as fine
for their roles in the repatriation of $8.1 billion by telecom giant,
MTN Nigeria.

 

The banks are Standard Chartered Bank which was debited with $7.8 million; Stanbic IBTC
 with $6.1 million; Citibank Nigeria with $3.9 million; and Diamond Bank $817,000

 

 

The apex bank alleged that the banks
issued irregular Certificates of Capital Importation (CCI) on behalf of
some offshore investors of MTN Nigeria Communications Limited.

 

MTN Nigeria was also directed by the CBN to refund $8.134 billion to its coffers.

 

In a letter to the Nigerian Stock
Exchange (NSE), Stanbic IBTC Bank informed investors and stakeholders
that CBN had “unilaterally deducted” the money billion from its account
with the regulator, despite the protests by the bank
that it did not violate any regulation on money remittances.

 

The apex bank said its investigation was
triggered by “allegations of remittance of foreign exchange with
irregular Certificates of Capital Importation (CCI)” between 2007 and
2015, in “flagrant violation of extant laws and regulations
of Nigeria, including the Foreign Exchange (Monitoring and
Miscellaneous Provisions) Act, 1995 of the Federal Republic of Nigeria
and the Foreign Exchange Manual, 2006”.

 

The letter was  signed by the Group Company Secretary, Mr. Chidi Okezie, and Acting Head, Marketing and Communications, Bridget Oyefeso-Odusami.

 

The letter stated: “Following our earlier
announcement to The Nigerian Stock Exchange (“NSE”) on 30 August 2018,
in respect of the penalty of N1.886 billion imposed by the Central Bank
of Nigeria (“CBN”) on our banking subsidiary
– Stanbic IBTC Bank PLC (the “Bank”) in relation to the remittance of
foreign exchange on the basis of certain capital importation
certificates issued to MTN Nigeria Communications Limited, we write to
update The NSE that the CBN has debited the account of
our banking subsidiary with the CBN for the full amount of the above
stated fine advised to the Bank.”

 

Stanbic IBTC reiterated its position that
it breached no extant laws relating to Certificates of Capital
Importation (CCI) executed on behalf of MTN.

 

“Stanbic IBTC Holdings PLC as well as our
banking subsidiary maintain our position on this matter, which is the
fact that the Bank has done nothing illegal and accordingly the bank
will continue to provide CBN with documents and
details in support of our contention that our actions in relation to
these transactions were not illegal,” it said.

 

The company reassured its stakeholders that the situation would not affect the seamless transactions with the bank.

 

Stanbic IBTC Bank described the conclusions reached by the regulator as based on “factually incorrect premises”.

 

Regarding the claim that the shareholders
of MTN Nigeria invested $402,590,261.03 in the company from 2001 to
2006, the bank said: “The twenty certificates of capital importation
CCIs transferred to our bank by Standard Chartered
Bank and which were in the above quoted sum were re-issued from
existing CCIs that had been issued by Standard Chartered Bank to the
original investors in MTNN.”

 

It added that “these CCIs were
transferred to our Bank to facilitate the repatriation of the proceeds
of MTN’s Private Placement which took place in February 2008.

 

A Standard Chartered Bank source said the
bank’s account with the CBN was also debited. He said: “I can confirm
to you that the CBN has debited all the four banks’ accounts with them
today.”

 

In statement, Citibank Nigeria Limited
said: “Citibank Nigeria Limited (Citi) recently received a letter from
the Central Bank of Nigeria (CBN) imposing sanctions on Citi for alleged
breaches of foreign exchange regulations in
respect of foreign exchange remittances done on behalf of a customer,
MTN Nigeria Communications Limited”.

 

“Citibank Nigeria Limited has sent a
detailed response to the CBN addressing the serious allegations made in
the CBN letter. Citibank Nigeria Limited remains committed to complying
with all extant foreign exchange rules and regulations
of the Federal Republic of Nigeria,” it said.

 

Standard Chartered Bank, in a statement,
said: “As previously disclosed, we are committed to fully co-operating
with the regulators on this matter. Whilst we cannot provide additional
information due to ongoing engagement with
the regulators, we look forward to a rapid resolution and satisfactory
outcome of this matter.”