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Thanks to all who read and shared this thread. Based on the feedbacks I got, I felt the need to answer some of the questions raised and to elaborate on some points. The Ultimate goal is to ensure that people are better informed about this topic #MTNRefund
1. What is CCI and why is it important?
CCI means – Certificate for Capital Importation. It is issued on evidence of importation of foreign exchange into Nigeria for the purpose of investment in a local company. This investment can be in form of cash or equipment. #MTNRefund
CCI means – Certificate for Capital Importation. It is issued on evidence of importation of foreign exchange into Nigeria for the purpose of investment in a local company. This investment can be in form of cash or equipment. #MTNRefund
The rule is that once you import FX to invest in a company in Nigeria you must sell the FX to the bank within 24 hours of inflow and the bank will issue a certificate for capital importation (CCI) IFO the investor. The CCI must indicate whether it's for Equity or loan. #MTNRefund
Question: Why did the CBN feel the need to issue an approval in-principle? It was probably because the shares where to be converted to preference shares. Preference shares are shares that still feels like debt. When you think Preference shares, think “Hybrid”. 😀 #MTNRefund
Now, this kind of conversion is not unusual. But the CBN obviously saw enough in the MTN board resolution authorizing the conversion to make them want to wait for evidence of implementation of an item on that resolution before it gave its final approval. #MTNRefund
6. This is where it gets murky. The CBN claims that in spite of the non fulfillment of the conditions it gave, MTN went ahead to convert the loans to preference shares and SCB issued CCI’s in respect of the ‘illegal” conversion. Note the use of the word "illegal" #MTNRefund
9. Having concluded its investigation, the CBN ordered the banks to refund to it the $8.1Bn that was “illegally Repatriated”. Does this mean that the money belongs to the CBN? No. The CBN is asking for return of its USD in exchange for the Naira MTN gave in return. #MTNRefund
Now this is where it gets interesting. Should the MTN return the $8.1 billion its shareholders collected and the CBN return back to them the Naira it got in exchange, it cld lose upto N2Trillon in the process. Do the Math Compare the $/N rate in 2007–2015 to rate today #MTNRefund
At the end of the day, the real negotiation (and there will be a negotiation) will be about the justification of this differential and not the entire $8.1 Billion. Will it be a two way negotiation between the banks and the CBN or 3 way with MTN included. We wait. #MTNRefund
This is a thread to help people understand the issues surrounding the recent fine imposed by the CBN on 4 banks and the request that they should refund $8.1 Billion in "illegally repatriated" dividends. This will be long, but let’s start from the beginning. #MTNRefund
A THREAD!
A THREAD!
This issue first come into the open in Sept 2016 when Senator Dino raised a motion accusing MTN of illegal repatriation of $13.92 billion to its parent company through 4 banks between 2006 - 2016 with the help of the Minister of Industry, Trade and Inv, Oke Enelamah. #MTNRefund
The Senate then mandated its Committee on Banking, Insurance and other Financial Institutions to carry out a holistic investigation on compliance with the Foreign exchange (monitoring and miscellaneous) Act by MTN Nigeria & Others. #MTNRefund
