THE BOTTOM LINE
Heard about MTN, the Russian dynamite ship, and Nigeria?
Conspiracy theories have sprung up all over the place about Nigeria's $10bn ‘retaliation’ against MTN
As MTN grapples with demands from Nigerian authorities for as much as $10.1bn, many analysts insist that ulterior motives are at work behind the scenes.
While it’s entirely possible that regulators are acting in good faith and MTN has something to answer for, analysts say the Nigerian government is shooting itself in the foot by causing serious financial harm to one of the country’s biggest companies.
Conspiracy theories have sprung up all over the place. One theory in the market is that Nigeria is retaliating after South African authorities detained a Russian ship bound for the West African state. The ship, which was detained in late August, was carrying illegal mining explosives, according to the Hawks.
Other market commentators claim that the Nigerian government is desperate for foreign exchange and that funds are needed to bolster the fiscus ahead of February 2019 elections. Nigerian media houses say some people may have a financial interest in MTN’s pain, since it’s customary for law firms and whistleblowers to take cuts of successful fines there.
Another analyst said a hostile takeover of MTN Nigeria could be in the works, whereby authorities cripple the company with fines and then pawn it off – presumably to a politically-connected person or group – for a small sum.
A more plausible theory is that regulators are deliberately trying to scupper MTN’s IPO. By agreeing to a local listing, authorities agreed to reduce MTN’s 2015 fine, for failing to disconnect unregistered SIM cards, from $5.2bn to $1.7bn. But they recently imposed a hard deadline for that condition to be met – the first half of next year. If MTN misses that deadline, it will have to pay the rest of the initial fine – another $3.5bn.