Cyril-Ramaphosa-Net-Worth

MTN Must Respect Nigeria’s Laws – Cyril Ramaphosa

Yemi Adebowale

MTN must follow the rules in countries where it does business, the South African Deputy President Cyril Ramaphosa has said.

“We will obviously be taking note of what is happening with a view of seeing how the company involved responds and reacts in this matter,” Ramaphosa told lawmakers in Cape Town on Wednesday. “We would like our companies to comply with the laws and regulations of countries where they operate, without violating those.”

The comments by Ramaphosa, a former chairman of MTN, suggest South African authorities may leave MTN to fend for itself as it seeks to have the penalty reduced. MTN shares have slumped 14 percent since Oct. 26, when Nigeria’s industry regulator imposed the fine for failing to disconnect customers with unregistered phone cards.

The Nigerian Communications Commission has given MTN until Nov. 16 to pay the fine, which relates to the timing of the disconnection of 5.1 million subscribers and is based on a charge of 200,000 naira ($1,005) for each unregistered customer. Nigeria is Johannesburg-based MTN’s biggest market with 62 million clients as of September.

“It does seem like in the case of Nigeria, there were issues, and those issues need to be addressed,” Ramaphosa said. “If this fine is indeed imposed as it is, it is going to impact on South Africa as well, as our revenue fortunes from a taxation point of view are going to be lower.”

South African authorities may be reluctant to confront their Nigerian counterparts following a series of diplomatic spats that have soured relations between Africa’s two biggest economies. The most recent occurred in April, when Nigeria’s government ordered its two most senior diplomats in South Africa to return home for consultations following a wave of attacks against immigrants, including Nigerians, in Johannesburg and Durban.

“South Africa does not have a track record of defending its national company champions internationally,” Nic Borain, a political analyst who advises BNP Paribas Cadiz Securities, said by phone. “On the face of it, this fine seems seriously over the top. Ramaphosa’s words about the issue seem weak as they veer too much on the side of caution.”

 

Source: Bloomberg

 

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