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Ramaphosa, president of South Africa, culpable in MTN Nigeria’s forex scandal?

President Cyril Ramaphosa of South Africa could be implicated in the allegation of gross foreign exchange violation against MTN Nigeria, according to an investigation by Finance Uncovered and Amabhungane, investigative websites based in the UK and South Africa respectively.

Ramaphosa, who was sworn in as South Africa’s President in February following the resignation of Jacob Zuma, was MTN’s non-executive Chairman as of the time the violations allegedly took place.

Also, Ramaphosa’s former investment holding company, Shanduka, is among MTN Nigeria’s major shareholders whose names have been mentioned in the forensic audit of billions of dollars which flowed illicitly in and out of Nigeria.

In September 2016, Dino Melaye raised the matter on the floor of the Senate, alleging that MTN had connived with a serving minister to illegally move over $12 billion out of Nigeria in the last decade.

“Between 2006 and 2016, the MTN, in collaboration with four commercial banks and with the help of a serving Minister, moved over $12 billion out of this country,” Melaye claimed

“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.”

MTN denied the allegation. But almost one year before Melaye’s revelation, Premium Times had published a report detailing how MTN Nigeria outwit Nigerian authorities to ship millions of dollars abroad, thereby avoiding paying adequate tax.”

According to a confidential audit report sighted by Finance Uncovered, no allegations of wrongdoing were made against MTN but questions were raised about whether MTN knew that its bankers violated Nigerian laws and that it might even have benefited from this.

South Africa’s Standard Bank, which is also MTN’s major banker, is one of several global banking groups alleged to have “breached” Nigeria’s foreign exchange regulations repeatedly, to the tune of billions of dollars over a period of 15 years.

A spokesperson for the bank in Nigeria refused to comment on the development, saying the bank had received no “formal communication” that it was being investigated.

South Africa’s Public Investment Corporation (PIC) was also accused of receiving an irregular forex clearance around the time it acquired its MTN Nigeria stake from Shanduka in 2015.

Ramaphosa’s family trust held a 29.6 percent stake in Shanduka but he eventually unbundled his shareholdings after he became deputy president in 2014.

The investment was a bad one for the PIC: the shares were declared to be worth R2,802,327,000 at the time of purchase; in the 2017 annual report for the PIC they were valued at only R996,000,000 – 35% of what they were bought for.

Much of the loss in value was due to the massive fine imposed on MTN in October 2015 for violations of Nigerian subscriber registration rules.

In August 2012, Ramaphosa’s Shanduka investment vehicle received clearance from its Nigerian bank, Standard Chartered Nigeria, to bring $10,9-million in preference shares and equity to Nigeria to invest in the MTN company there.

Also, the Nigerian forensic report indicates that between October 2012 and January 2015, Shanduka Telecommunication (Mauritius) Limited received dividends of $88,7 million from MTN Nigeria.

At the time, Ramaphosa held the largest stake in Shanduka, and was also the non-executive Chairman of the MTN Group.

As of late February 2018, MTN’s official website showed Shanduka Telecommunication (Mauritius) as owning 2.71% of MTN Nigeria. But the website was updated days later to reflect a new shareholder: South African state-owned Public Investment Corporation (PIC)

When contacted, a spokesperson for the PIC confirmed that the corporation “acquired MTN Nigeria shares through Over The Counter (OTC) market in Nigeria … in 2015 for USD 230.993 million”.

“The parties involved in the transaction were Standard Chartered bank, which acted as an Escrow Agent and Sao Capital as the transaction advisor,” he said. “There was no negotiation with Mr Ramaphosa, Shanduka or MTN.”

Read the full story here.

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