MTN has engaged Eric Holder, the former US attorney-general, to help challenge a N1.04trn fine imposed by Nigerian regulators for the company’s failure to disconnect unregistered mobile phone subscribers.
According to reports, Mr Holder, returned to Washington-based corporate law firm Covington and Burling after standing down as attorney-general in April, made an initial visit to Abuja last month to plead with senior Nigerian officials on behalf of the South African telecoms group.
As US attorney-general between 2009 and 2015, Eric Holder presided over the biggest corporate settlements in US history. These included the $13bn that JPMorgan Chase paid over the sale of mortgage-backed securities before the financial crisis, and BP’s $18bn fine for the Horizon oil spill.
The penalty facing MTN is much greater at nearly 95 per cent of its earnings in Nigeria, its largest market with 62m subscribers and 42 per cent for the group. But so far Nigerian authorities have been largely unmoved by company pleading, arguing the figure was computed strictly according to laws set out in 2011.
MTN has declined to comment on the allegations regarding Mr. Holder’s subsequent engagement. It will be recalled that the fine was originally set in November at $5.2bn, roughly $1,000 for each unregistered subscriber. It was then reduced with a deadline of December 31 for payment, but MTN appealed arguing that the regulator had overstepped its authority.
Umar Danbatta, executive vice-chairman of the Nigerian Communications Commission, said there was no intention to “kill” the company and that the commission would be working towards an “amicable settlement”. However, the final decision rests with President Muhammadu Buhari.
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