Illegal Repatriation of $8,1bn: Court Fixes Dec. 4, For Hearing Of MTN’s Suit Against FG, CBN

At the resumed hearing of the matter Tuesday, Chief Wole Olanipekun (SAN), leading four other Senior Advocates of Nigeria for MTN, informed the court that CBN has filed its defence and counter claim to the suit filed by his client and that his client had also filed response to the said defence and counter claim.

In response, counsel to the CBN, Mr Seyi  Sowemimo (SAN), leading Mr Demola Akerele, SAN, told the court that the CBN has filed preliminary objection in addition to the already filed statement of defence and counter-claim.

Though, the AGF is yet to file any defence.

The presiding Judge, Justice Saliu Saidu  after going through the court’s records  observed that there was no proof of service before the court to show that the AGF had filed any response, though there is proof of service of other process filed by other party.

Thereafter, with the agreement of the the two parties, Justice Saidu adjourned  for hearing.

According to a statement of claim jointly filed before the court by Chief Wole Olanipekun and four other Senior Advocate of Nigeria, MTN states that between 2001and 2006 its shareholders invested the total sum of $402,590,261.03 into it to meet the various obligations, including statutory payments to the government of Nigeria which was confirmed by the CBN.

The investment according to MTN were issued by  authorised dealers who are Standard Chartered Bank, Diamond Bank and Citibank, the CCI were converted into equity and preferential shares, as the article of the association allows it to alter its share capital.

However, by a letter signed by the CBN Governor communicated to MTN through the Managing Director of Stanbic Chartered Bank Limited whereby, it decided amongst others, against the plaintiff, that “the action of your company and the banks represent a flagrant violation of the extant laws and regulation of the Federal Republic of Nigeria on foreign exchange matters.

The sum of $8,134,312,397.63 illegally repatriated by MTN on the basis of illegally issued of CCIs should be refunded to the covers of the Central Bank of Nigeria with immediate effect ”

MTN said that the CBN lacks power to make a finding of illegality and that it also has no power to penalise the plaintiff on its illegality in the sum of $8, 134, 312, 397. 63 billion or in any sum  whatsoever.

Consequently the plaintiff claims against the defendants thus: A declaration the CBN lacks the power to determine the civil obligations or penal liabilities of the plaintiff.

A declaration that the plaintiff is not liable to pay the sum $8,134,312,397.63 demanded as penalty from it by the defendants vide his letter of 3rd September, 2018.

An Order of injunction restraining the defendants, their agents whatsoever acting on their authority from giving effect to the decisions,demands and directive contained in the letters of August 28 and September, issued by the defendants

But the CBN in a statement of defence and counter claim filed before the Court averred that MTN Nigeria communication Limited deliberately withheld information on What proportion of the sum of $402, 590, 261,03 was imported into the Federal Republic of Nigeria as Shareholders loan and as equity.

CBN stated that in the course of its supervision of the foreign exchange market, an issue of foreign exchange with irregular Certificate of Capital Importation (CCI) arose in respect of certain foreign exchange transactions  carried out by Standard Chartered Bank Limited, Stanbic IBTC Bank Limited, Citi Bank Nigeria Liimited and Diamond Bank Plc collectively referred to as “the banks”

CBN stated that upon carried out a special investigation of the said transactions and it came to conclusion that the banks had at the material time between 2007 and 2015 used irregular CCI to remit foreign exchange amounting to $8 134, 312, 397. 63 billion on behalf of MTN Communications Limited and for the benefit of its shareholders.

CBN also stated that it met the banks and MTN’s representatives on May 25, 2018 on the issue and they each made copious representation to CBN. Upon consideration of all the relevant issues including MTN and the banks’ representations CBN demanded immediate refund of the foreign currencies repatriated to its account.

The apex bank also stated that Standard Chartered Bank Limited, one of the bank  involved in the alleged irregular transactions admitted in writing that it repatriated foreign exchange for MTN without obtaining a final approval from CBN and further stated that its action was unintentional omission which is regretted and the MTN conceded this in its statement of claim.

CBN said it will rely on the Standard Chartered Bank Limited statement at the trial of this suit. It also further averred that contrary to  MTN statement of claim, it was condition precedent to obtain the CBN’s final approval before foreign exchange currency can be repatriated in the circumstances and MTN and the banks are aware of this condition.

CBN contended that MTN would not make a similar claim of right as is being made in this suit in United States Of America, in the United kingdom, the Republic of South Africa or other countries of the world.  And that MTN did not comply with the conditions attached to the CBN approval in principle, as MTN refused to provide an undertaking that no remittance for both interest and principal would be made on loan to its shareholders from the date of the loan to the date of its conversion into preference shares.
CBN said that the names of the banks were cleverly omitted by MTN  from this suit.
The CBN  averred that it did not deny that the plaintiff has a right to alter its share capital structure, but such alteration has a corresponding effect of CCI from shareholders loan to equity,  its approval became necessary.
The action of the banks and the circumstances of MTN leads to the inference that the foreign investment transaction may have been premeditated and contrive as a scam to maximise profits, defraud the Federal Republic of Nigeria and to enjoy unlimited foreign exchange laws and regulation