MTN Group Ltd. extended gains after Nigerian lawmakers ruled that allegations of illegal repatriation of almost $14 billion were unfounded and the wireless company hadn’t violated the law.
There were no “proofs of collusion to contravene the foreign exchange laws,” a Senate investigative committee said in its report released on Wednesday in the capital, Abuja. “There was evidence of massive capital outflow but that alone is not conclusive that a crime has been committed,” it said.
The shares rose as much as 0.5 percent in Johannesburg, following a 2.3 percent gain late Wednesday when the ruling was first reported. That values Africa’s biggest mobile-phone company by sales at 242 billion rand ($17 billion).
Nigeria’s decision to drop the case indicates that relations between the government and the country’s mobile market leader are on the mend following the settlement of a $1 billion fine last year. MTN has agreed to list its local unit on the stock exchange in Lagos, and Chief Executive Officer Rob Shuter said last week the IPO was on track to conclude in about six months. The penalty levied by the Nigerian Communications Commission was for missing a deadline to disconnect about 5 million subscribers in a security crackdown.
The legislators asked the Central Bank of Nigeria to take measures against Stanbic IBTC Nigeria Plc “for improper documentations” regarding capital repatriation and loan repayments, adding that steps should be taken to enforce foreign-exchange laws to deal with known deficiencies.
Dino Melaye, a senator, more than a year ago accused MTN of illegally repatriating $13.92 billion over a decade starting in 2006, triggering the investigation.
MTN spokesman Chris Maroleng confirmed the case has been dropped. Stanbic IBTC is aware of the Senate’s statement and is “awaiting formal communication from the relevant committee,” the lender said in an emailed response.
Nigeria is MTN’s biggest market, with more than 50 million customers. The shares traded 0.3 percent higher at 128.21 rand as of 9:31 a.m. in Johannesburg.