MTN In $12 bln Money Laundering Palava

MICHAEL AKINOLA with agency report

Trouble seems far from been over for the telecoms giant, MTN as the Nigerian Senate on Thursday approved probe into an allegations of $12 billion money laundering levelled against the company. 

The Senate was told of how the South African telecom company allegedly laundered the billions of dollars over a number of years, while failing to pay necessary tax in the country.

Dino Melaye, representing Kogi West, raised the matter on Thursday and he accused MTN of removing $12 billion from Nigeria illegally.

Members of the upper chamber were clearly angered  when the revelations were made on the floor that the company connived with four commercial banks and a serving minister to ferret out money from Nigeria.

Melaye said that MTN has been involved in the gross money laundering.

He said, “Between 2006 and 2016, the MTN, in collaboration with four commercial banks and with the help of a serving Minister, has moved over $12 billion out of this country”.

He made the revelation under order 42 of the Senate rule and said it was particularly painful that the company was involved in illegal money movement at a time Nigeria was in economic mess.

“All hands must be on deck to recover every loot in the country. We are in a precarious situation and now is the time to recover every stolen money in the country,” he said.

The Senate president, Bukola Saraki, approved Melaye’s request that the matter be formally tabled with necessary prayers on Tuesday, an indication the senate is likely to launch full investigation into the scam.

The Senate is hearing the case nearly a year after a PREMIUM TIMES’ investigation exposed how MTN for several years, sidestepped Nigerian laws to ship billions of dollars abroad — in so doing, paid less tax in Nigeria.

The 11-month-long investigation showed that the company had been running circles around Nigerian revenue authorities using a complex but noxious tax avoidance scheme called Transfer Pricing.

According to the online newspaper, MTN Nigeria allegedly been making payments to two overseas companies – MTN Dubai and MTN International in Mauritius – both located in tax havens.

In 2013 for example, MTN allegedly set aside N11.398 Billion from MTN Nigeria to pay to MTN Dubai. A similar transfer of N11.789 Billion was made by MTN Ghana to the same MTN Dubai, making it a total of N23.187 Billion that was shipped to the Dubai offshore account.

MTN was said to have admitted in a disclosure in 2013 that it made unauthorized payments of N37.6 Billion to MTN Dubai between 2010 and 2013. The transfers were then “on-paid” to Mauritius, a shell company with zero number of staff and which physical presence in the capital Port Louis is nothing more than a post office letter box.

The disclosure amounted to a confession, given that MTN made the dodgy transfers without seeking approval from the National Office for Technology Acquisition and Promotion (NOTAP), the body mandated to oversight such transfers.

On the basis of an earlier management fees agreement that was technically quashed by NOTAP and on the basis of MTN’s reported revenues, it is estimated that N90.2 Billion could have been transferred out of Nigeria in management fees alone since the company was founded in 2002.

MTN, which was recently fined by the Nigerian government for failing to disconnect unregistered subscribers, has a substantial network of subsidiaries in offshore tax havens, including the British Virgin Islands, Dubai and Mauritius.

Until 2010, MTN Nigeria had an agreement with MTN Dubai to pay 1.75% of revenues to the company for management, and royalties for the use of the MTN trademark.

Nigeria requires that management fees paid by multinationals are approved by the National Office for Technology Acquisition and Promotion (NOTAP). The fee payments had been reversed following a failure to come to a new agreement on management fees with Nigerian regulators.

MTN’s previous agreement with NOTAP expired in 2010. Notwithstanding, MTN continued to make payments overseas.

At the time, MTN told PREMIUM TIMES that it continued to make payments because it expected NOTAP to approve a new deal and backdate it to the date of the expiry of the previous deal.