MTN Group Limited’s plan to sell shares in its Nigerian unit on the Nigerian Stock Exchange next year is at risk following allegations by lawmakers that Africa’s biggest wireless carrier illegally moved almost $14bn out of the country, according to two people familiar with the matter.
In the event of a lengthy legal process to dispute the claims, the proposal could be delayed indefinitely, said the people, who asked not to be named because the information is private.
The Johannesburg-based company had been targeting a listing in the third quarter of 2017,Bloomberg quoted the sources to have said.
MTN remains committed to the listing and will proceed with the share sale when it is legally and commercially possible, a spokesman for the carrier said.
“The threat of the unresolved allegations makes it hard to place a proper valuation on the company and makes a listing challenging,” Peter Takaendesa, a money-manager at Mergence Investment Managers in Cape Town, said by phone.
“Nigeria needs this listing to strengthen the market and increase liquidity. For MTN, it would diversify ownership and improve country and government relations,” he added.
MTN is accused of repatriating the funds over 10 years starting in 2006, according to Senator Dino Melaye, who raised the issue in September.
The allegations came after the company agreed to pay a N330bn ($1bn) fine in cash to the Federal Government for missing a deadline to disconnect customers, who did not register their Subscriber Identification Module cards. That settlement also included a pledge to list the Nigerian unit on the bourse.
“We cannot comment on a matter under investigation. All the stakeholders should wait for the outcome of the investigation,” the Nigerian Communications Commission spokesman, Tony Ojobo, said by phone
The four banks involved in the alleged illegal transfers are Citigroup Inc., Standard Chartered Plc, Stanbic IBTC Holdings Plc and Diamond Bank Plc. In July, MTN appointed units of Citigroup and Standard Bank to advice on the listing.
MTN shares fell by 1.4 per cent at 111.38 rand at 9.59am on Friday. The stock has declined by 16 per cent this year, valuing the company at 214 billion rand ($15.2bn).