The Senate yesterday absolved the Mobile Telecommunication Limited (MTN) Nigeria of alleged unscrupulous violation of the Foreign Exchange Act.
The exoneration of the MTN of wrong doing followed the adoption of the report of the Senate Committee on Banking, Insurance and other Financial Institutions which investigated allegations of capital flight levied against the telecommunication giant.
Chairman of the committee, Senator Rafiu Ibrahim presented the 40 page report to the Senate in plenary.
The report said that the committee did not receive proof of collusion to contravene the foreign exchange laws.
It noted that there was evidence of massive capital outflow but the fact alone is not conclusive that a crime has been committed.
The upper chamber adopted the recommendation to “condemn the Central Bank of Nigerian for failing in its duty to bring forth observed deficiencies of Foreign Exchange (Monitoring and Miscellaneous) Act (FEMMA) for amendment rather than granting extensions and exemptions which became prone to abuses.”
It also adopted the recommendation to “mandate the CBN to sanction Stanbic IBTC for improper documentations in respect of capital repatriation and loan repayments amounting to $388,195,183 and $199,440,952.07 respectively.
It also accepted the recommendation to sanction the activities of Stanbic IBTC Nominees in the matter of shares transfer and splitting for the purpose of dividend repatriation.
It mandated the CBN to come up with a proposal for the amendment of FEMMA with a view to ensuring the growth of the economy through massive foreign capital inflow and greater retention of the foreign exchange.
It directed the CBN to forthwith render periodic status report to the Senate on the performance of foreign investments inflow and outflow.
The committee chairman explained that it is important to stress that the investigation was not in anyway intended to discredit investors who took the plunge in the seemingly murky waters of Nigerian nascent telecommunications sector.
He noted that it was investigative effort that followed public sector uproar, interest and curiosity over what some alleged as capital flight of over $13.6 billion between 2006 and 2016, or over $1 billion annually by MTN and its investors in the guise of repatriation of dividends/profit and repayment of loans payment to licenses/management.
The committee chairman said that the goal of the investigation was to find out whether there was indeed “repatriation of $13.92 billion illegally out of Nigeria by MTN through its banks between 2006 and 2-16.
The report said that the committee established that for the period under investigation (2001-2016) a total capital inflow of $1,243,031,108.83, was injected for MTN operations in Nigeria.
The report noted that “No doubt, there is a disturbing evidence of foreign exchange hemorrhage in Nigeria especially in this period of recession.”
It said “MTN for instance repatriated over $1.3 billion annually since 2006, or N13.92 billion between 2006 and 2016. Just for one company, the phenomenon constitutes a huge outflow that could pose challenges for foreign exchange and national economy stability.”
It said that the harm capital flight phenomenon is inflicting on developing countries has become a subject of interests for students of international finance, development and law.
It added that experts estimate that for every one dollar imported into developing countries, they lose five dollars at the end of the transaction.
The report said that there were some Certificates of Capital Importations (CCIs) which presented some challenges.
It added, “there was general complaint about the seeming impracticability in complying with the statutory requirement, which the banks sought to itigate by seeking and obtaining approval from the CBN.
The committee quoted the CBN to have said “approve CCI only when (a) bank is not able to meet up with the documentation, which should be 24 hours.”
Most senators commended the report and stressed that foreign investors who brave the odds to do business in the country should also be encouraged to recoup their investment.
Most senators commended the report and stressed that foreign investors who brave the odds to do business in the country should also be encouraged to recoup their investment. The Nation