MTN Plans 2017 Stock Exchange Listing In Nigeria. Did Eric Holder Help?

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Written by Dana Sanchez

South Africa-based mobile service provider MTN said it will list its shares on the Nigerian Stock Exchange in 2017 as part of a legal settlement with the Nigerian government.

In October, MTN was fined a record $5.2 billion by the Nigerian telecoms regulator for failing to disconnect unregistered SIM users. The fine was lowered to $3.9 billion. MTN announced in June that it had settled with the government, agreeing to pay $1.7 billion over three years, and list on the Nigerian Stock Exchange, Independent Online reported.

MTN’s stock exchange listing is expected to boost the Nigerian capital market and create wealth for Nigerians, according to The Cable.

MTN is the largest mobile phone operator in Nigeria with 57 million subscribers. Nigeria accounts for about a third of MTN’s revenue, according to CNBCAfrica.

Nigeria imposed the massive fine on MTN after warning telecoms operating in the country to cut service to unregistered phones. The government was concerned unregistered phones were being used for criminal activity, including by Islamist militant group Boko Haram, Reuters reported, according to Pulse.ng.

In January, MTN hired former U.S. Attorney General Eric Holder to help it reduce a $3.9 billion fine. Holder was in public office during some of the largest corporate settlements in American history, and his addition to the MTN legal team marked a change of strategy for the Johannesburg-based company, Reuters reported.

In a letter dated Feb. 4, MTN announced it was dropping its challenge against the Nigerian government over the massive fine. Holder wrote a letter to Nigerian Attorney General Abubakar Malami on behalf of MTN offering to pay a reduced fine and list MTN’s local unit on the Nigerian stock exchange to end the dispute.

The Nigerian Communications Commission rejected the initial proposal for a settlement, but three months later, accepted a similar deal, Reuters reported.

Lawmakers have criticized the settlement process as lacking transparency, saying it set a precedent for other firms dealing with Nigerian authorities.

The deal exposed divisions within the Nigerian government. Officials on President Muhammadu Buhari’s team were unhappy with Malami’s plans to strike a deal with MTN which they considered too generous, government sources told Reuters.

“It was never about the money. It was about making clear the rules are the rules,” NCC spokesman Tony Ojobo told Reuters on June 13. “The MTN listing is a big positive for Nigeria and will benefit the country.”

Holder was hired by MTN through the Washington-based law firm, Covington and Burling. Holder joined the firm in 2015 after serving six years as U.S. attorney general.

Holder was in public office during the $13 billion JPMorgan Chase settlement for selling toxic mortgages in the run-up to the financial crisis. He was also attorney general during the BP Deepwater Horizon oil spill case, which exceeded a $20 billion settlement, Reuter reported.

For the stock exchange listing, MTN Nigeria has appointed Stanbic IBTC Capital, Standard Bank of South Africa and Standard Advisory London, and Citigroup Global Markets, as joint transaction advisors and global coordinators, Reuters reported. Stanbic is acting as lead issuer.