MTN. (Duncan Alfreds, Fin24)
Johannesburg - MTN Group [JSE:MTN] will challenge a $3.9bn (approximately R58bn) Nigerian fine in court after resolving that the penalty that’s wiped 28% off the company’s value wasn’t within the powers of the country’s telecommunications regulator to impose.
Africa’s biggest phone company will also continue to engage with the Nigerian authorities to try and ensure an amicable resolution, MTN said in a statement on Thursday.
Pending the court hearing, neither party should take further action until the matter is resolved, the company said.
“There are valid grounds upon which to challenge the fine,” MTN said.
“Accordingly MTN has followed due process and has instructed its lawyers to proceed with an action in the Federal High Court in Lagos seeking the appropriate reliefs.”
The Nigerian Communications Regulator imposed the penalty on MTN for failing to meet a deadline to disconnect 5.1 million unregistered subscribers as security agencies seek to fight crime in a country with poor identity records.
Chairperson Phuthuma Nhleko is leading negotiations with the NCC after Chief Executive Officer Sifiso Dabengwa resigned.
The initial fine of $5.2bn was reduced by 25% to $3.9bn earlier this month, with a payment deadline set for December 31.
NCC spokesperson Tony Ojobo declined to comment on MTN’s plan to challenge the fine.
MTN shares gained 6.3% to R138.20 rand at the close in Johannesburg, the highest since December 3. That values the company at R255bn.