Ololade Adeyanju/
A Federal High Court in Lagos is set to hear applications in the $8,134,312,397.63 fine slammed on MTN by the Central Bank of Nigeria (CBN) over alleged scam.
Justice Saliu Saidu has adjourned the hearing of preliminary objection filed by CBN and other pending applications in the suit filed by MTN Nigeria Communications Limited against the CBN fine till December 4.
Joined as a co-defendant is the Attorney General of the Federation AGF.
When the case was mentioned, Chief Wole Olanipekun SAN leading four other Senior Advocates of Nigeria and 15 other lawyers informed the court that CBN had filed defence and counterclaim to the suit filed by MTN and his client had also filed response to the said defence and counterclaim.
However, the counsel representing the CBN, Mr Seyi Sowemimo SAN, leading Mr Demola Akinrele SAN and nine other lawyers told the court that the CBN had filed a preliminary objection in addition to the already filed statement of defence and counterclaim, though the Attorney General of the Federation has not filed any defence.
Justice Saidu also 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 services of other process filed by other parties.
Thereafter, by the agreement of the counsels of the two parties, Justice Saidu adjourned for hearing.
In a statement of claim jointly filed before the court by Chief Wole Olanipekun and four other Senior Advocates of Nigeria, MTN states that between 2001 and 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 was issued by authorized dealers who are Standard Chartered Bank, Diamond Bank and Citibank; the CCI was converted into equity and preferential shares, as the article of the association allows it to alter its share capital.
However, a letter signed by the Governor of CBN communicated a decision 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 letter further says: “The sum of $8,134,312,397.63 illegally repatriated by MTN on the basis of illegally issued Certificate of Capital Importation (CCIs) should be refunded to the covers of the central bank of Nigeria with immediate effect.”
MTN argued that the CBN lacked the power to make a finding of illegality and it also “has no power to penalise the plaintiff on its illegality in the sum of $8,134,312,397.63 or in any sum whatsoever”.
Consequently, the plaintiff claims against the defendants thus: A declaration that 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 of $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, 2018 and September, 2018 issued by the CBN.
However, in a statement of defence and counterclaim filed before the court by the CBN counsel, Mr Seyi Sowemimo, the Apex bank averred that MTN 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 equity.
The statement says: “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 Limited and Diamond Bank Plc collectively referred to as “the banks”.
“CBN carried out a special investigation of the said transactions and it came to light that the banks had at the material time between 2007 and 2015 issued irregular CCI to remit foreign exchange amounting to $8 134,312,397.63 on behalf of MTN Communications Limited and for the benefit of its shareholders.
“CBN met the banks and MTN’s representatives on 25th May 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 an immediate refund of the foreign currencies repatriated to its account.
“Standard Chartered Bank Limited, one of the banks involved in the irregular transactions admitted in writing that it repatriated foreign exchange for MTN without obtaining a final approval from CBN, it further stated that its action was unintentional omission which is regretted, and the MTN conceded this in its statement of claim. CBN intended to rely on the Standard Chartered bank limited letter at the trial of this suit.
“CBN averred further that contrary to the statement of claim of MTN, 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 it 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.
“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 averred that the names of the banks were cleverly omitted by MTN from this suit.
“The CBN 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 contrived as a scam to maximise profits and defraud the Federal Republic of Nigeria and to enjoy unlimited foreign exchange laws and regulation.
“Contrary to the averments of the plaintiff, CBN averred that it is empowered by statute to summarily exercise certain disciplinary powers on the dealers and the participants of the foreign exchange for its Naira equivalent the foreign currencies irregularly repatriated through the banks by the MTN.
“Most importantly, and contrary to the averments of the plaintiffs, the $8,134,312,394.63 improperly repatriated by the plaintiff and the banks were purchased from the foreign reserve of the Federal Republic of Nigeria maintained by the CBN for the welfare and benefit of all Nigerians.
“CBN avers further that the amount improperly purchased signifies a large fraction of the current total reserves of the CBN which stood at $45,000,000, 000 as at 20th September 2018.
“The CBN maintains that MTN is not entitled to the award of any reliefs against it and shall prove at the trial that the plaintiff’s claims against it are frivolous, baseless, unmeritorious, and a tactic to frustrate the enforcement of the directive of the CBN.
“Consequently, the defendants counterclaim in the sum of $8,134,312,397.63 and the sum of N400million as the solicitors’ fees and litigation cost. Interest on same at the rate of 15% per annum from 28th August 2018 till judgement and thereafter, at the rate of 10% till final liquidation.”
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