The Nigerian Senate has heard how South African
telecom giant, MTN, allegedly laundered billions of dollars over a number of
years, failing to pay necessary tax in the country.
Dino Melaye, representing Kogi West, raised the
matter on Thursday.
He accused MTN of removing $12 billion from Nigeria illegally.
Members of the upper chamber were clearly
angered when the revelations were made on the floor that the company
connived with four commercial banks and a serving minister to ferret out money
from Nigeria.
Mr. Melaye, representing Kogi West, said on
Thursday in Abuja at the senate that MTN, has been
involved in gross money laundering.
Mr. Melaye said, “Between 2006 and 2016, the MTN,
in collaboration with four commercial banks and with the help of a serving
Minister, has moved over $12bn out of this country”.
He made the revelation under order 42 of the Senate
rule and said it was particularly painful that the company was involved in
illegal money movement at a time Nigeria was in economic mess.
“All hands must be on deck to recover every loot in
the country. We are in a precarious situation and now is the time to recover
every stolen money in the country,” he said.
The Senate president, Bukola Saraki, approved Mr.
Melaye’s request that the matter be formally tabled with necessary prayers on
Tuesday, an indication the senate is likely
to launch full investigation into the scam.
The Senate is hearing the
case nearly a year after a PREMIUM TIMES’ investigation exposed how MTN for
several years, sidestepped Nigerian laws to ship billions of dollars abroad —
in so doing, paid less tax in Nigeria.
The 11-month-long investigation showed that the company had
been running circles around Nigerian revenue authorities using a complex but
noxious tax avoidance scheme called Transfer Pricing.
MTN Nigeria, PREMIUM TIMES
established, had been making payments to two overseas companies – MTN Dubai and
MTN International in Mauritius – both located in tax havens.
In 2013 for example, MTN
set aside N11.398 Billion from MTN Nigeria to pay to MTN Dubai. A similar
transfer of N11.789 Billion was made by MTN Ghana to the same MTN Dubai, making
it a total of N23.187 Billion that was shipped to the Dubai offshore account.
In a rare disclosure in
2013, MTN admitted it made unauthorized payments of N37.6 Billion to MTN Dubai
between 2010 and 2013. The transfers were then “on-paid” to Mauritius, a shell
company with zero number of staff and which physical presence in the capital
Port Louis is nothing more than a post office letter box.
The disclosure amounted to
a confession, given that MTN made the dodgy transfers without seeking approval
from the National Office for Technology Acquisition and Promotion (NOTAP), the
body mandated to oversight such transfers.
On the basis of an earlier
management fees agreement that was technically quashed by NOTAP and on the
basis of MTN’s reported revenues, it is estimated that N90.2 Billion could have
been transferred out of Nigeria in management fees alone since the company was
founded in 2002.
MTN, which was recently
fined by the Nigerian government for failing to disconnect unregistered
subscribers, has a substantial network of subsidiaries in offshore tax havens,
including the British Virgin Islands, Dubai and Mauritius.
Until 2010, MTN Nigeria had
an agreement with MTN Dubai to pay 1.75% of revenues to the company for
management, and royalties for the use of the MTN trademark.
Nigeria requires that
management fees paid by multinationals are approved by the National Office for Technology Acquisition and Promotion (NOTAP). The fee payments had been
reversed following a failure to come to a new agreement on management fees with
Nigerian regulators.
MTN’s previous agreement
with NOTAP expired in 2010. Notwithstanding, MTN continued to make payments
overseas.
At the time, MTN told
PREMIUM TIMES that it continued to make payments because it expected NOTAP to
approve a new deal and backdate it to the date of the expiry of the previous
deal.
PREMIUM TIMES made
sustained but unsuccessful efforts to get NOTAP and the Federal Inland Revenue
Service (FIRS) to comment on the MTN practices in Nigeria.
...Premiumtimes
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