MTN agrees to Pay US$25mn toward record US$3.9bn Nigeria Fine

LAGOS, Nigeria, Capital Markets in Africa — MTN Group Limited, Africa’s largest mobile-phone company, agreed to pay 50 billion nairas (US$251 million) toward a record US$3.9 billion fine in Nigeria for missing a deadline to disconnect unregistered subscribers.

The payment to the Nigerian government was made “on the basis that this will be applied toward a settlement, where one is eventually, hopefully, arrived at,” the Johannesburg-based company said in a statement on Wednesday. MTN also agreed to withdraw the matter from the High Court in Lagos “in an effort to achieve an amicable settlement,” the company said.

MTN shares erased declines and rose as much 3 percent in Johannesburg, trading 2.3 percent higher at 130.78 rands as of 2:20 p.m. local time. The stock has declined 31 percent since the fine, originally set at $5.2 billion, was made public on Oct. 26.

MTN was hit with the penalty after failing to comply on time with an order to disconnect 5.1 million customers deemed by the regulator to be unregistered in Africa’s most populous country. Nigeria has sought to cut off service to some users as they fight crime and in a country with poor identity records. The insurgency group Boko Haram’s campaign to establish its version of Islamic law in Nigeria has left thousands of people dead since 2009.

Executive Chairman Phuthuma Nhleko is continuing to lead the negotiations with the Nigerian Communications Commission, the regulator that imposed the fine. MTN is also in talks with the NCC over the lifting of sanctions imposed on the company for failing to meet phone-service quality standards.

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