MTN's R119bn Nigeria shock turns contagious

Coronation Fund Managers, one of MTN’s largest shareholders, fell as much as 6.6%.

Government employees, via the Public Investment Corporation, lost more than R5bn on MTN’s share price slide.

David Shapiro, deputy chairman of Sasfin Wealth, said that he was “shocked by the news” and that it reinforced his “very sceptical” stance towards investments in the rest of Africa.

Despite the continent’s potential, “you have governments, and I must include SA, that are largely unpredictable”.

MTN said it planned to “vigorously defend” its case. The company is planning a public listing in Nigeria and is trying to get a mobile money licence in that country – its largest market.

CBN spokesperson Isaac Okorafor denied that the central bank was on a “witch-hunt” against the company, as some analysts claimed. “These are established cases of gross violation of laws and regulations …. Examiners were sent to these banks, the cases were thoroughly investigated [and] all parties were invited by CBN to a meeting, and responses were obtained clearly proving that laws and regulations were breached,” Okorafor told Business Day by e-mail.

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