MTN Nigeria Settlement Deal Fails To Pull Up Share Price
MTN stock has gone up by only 2.8% since the settlement matter was concluded on December 24, still 20% below the price it had been in late August. That was the month that Nigeria’s central bank first accused the Johannesburg-based wireless carrier of having illegally repatriated funds from Nigeria, its biggest market.
In addition to the now settled repatriation case, MTN has another Nigerian court hearing on the 7th of February over an unrelated claim that it owes the federal government $2bn in back taxes. MTN disputes this allegation.
The telecoms giant was also previously fined $1bn in Nigerian for failing to disconnect its subscribers without proper registration.
Sanlam Private Wealth’s Money Manager, Nicholas Kunze speculated that it seems the market is unsure about when or if the Nigerian government might want to throw yet another enormous fine at MTN again.
He said that the market is wondering when the lawsuits will stop because it has only been two years since MTN’s last falling out with the Nigerian government and yet there are still more legal matters coming up every now and then.
MTN is the mobile market frontrunner in Nigeria with over 66 million customers, so it is also exposed to more risks facing Africa’s largest oil producing nation, such as the crashing oil price and next month’s scheduled presidential election.
According to an independent trader based in Cape Town, Karin Richards, MTN is currently uninvestable because, in her opinion, the constant claims for such massive amounts are probably taking up a large amount of management time.
Credit: This article originated from www.fin24.com