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The MTN Nigeria Tax Issue is Serious

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MTN Nigeria, subsidiary of South-Africa’s telecommunications conglomerate MTN Group, is facing a multi-billion financial dispute with the Central Bank of Nigeria (CBN) and the Attorney General of the Federation. As a result, MTN Nigeria has sued them both. The lawsuit concerns the turmoil surrounding MTN’s potentially improper repatriation of US$ 8.1 billion, and an additional US$ 2 billion in additional taxes it was ordered to pay. MTN Nigeria is currently seeking an injunction to prevent the duo from collecting on the disputed monies. MTN claims to have always complied with tax law and other financial obligations. This complex issue entangles South Africa, Nigeria, and the important communications sector. MTN’s legal battle with Nigeria’s central bank and Attorney General could augment risk in South Africa’s financial system. A near-term repatriation of billions to Nigeria could impact MTN’s ability to meet its debt obligations, thus creating a cascading effect into South Africa’s banking sector. The South African Reserve Bank is on watch over this legal/geopolitical issue.

MTN also finds claims by the two entities to be unclear and conflicting. Head of Corporate Relations for MTN Nigeria, Tobe Okigbo, stated, “The allegations being made involve issues that appear to be complex and so are easily misunderstood and misinterpreted. They are made even more confusing when the relevant authorities send conflicting messages and instructions and act in a way that appears uncoordinated and at cross purposes. The Attorney General, while communicating us, has directed that the payment of the US$ 8.1 billion is dealt with through his office rather than as directed by the CBN. . . With situations like this, it is vital for both the government, regulators and the company to have absolute clarity on the nature of both the allegations being made and the processes that are being followed.”

MTN has vowed to continue to fight any charges connected to the CBN and AGF investigations. MTN also has no intentions of paying any of the money being sought. The AGF is holding firm to its accusation that MTN evaded its obligation to pay the US$ 2 billion in taxes. If the AGF and Central Bank are successful, MTN will be on the hook for the sum of US$ 10.134 billion.

According to the Central Bank of Nigeria, MTN and four banks flouted the laws and regulations including the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 and the Foreign Exchange Manual, 2006. The Central Bank of Nigeria highlighted the four banks accused of facilitating the alleged illegal transfers – Standard Chartered Plc, Citigroup Inc, Stanbic IBTC Plc and Diamond Bank Plc. All the banks denied any wrongdoing

MTN Group Limited is formerly known as M-Cell.

KIC to Manage a Portion of Korea Post Assets

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In late February, the Korea Investment Corporation (KIC) inked an agreement to manage some of Korea Post’s global assets. KIC also seeks to provide investment training and research to Korea Post.

“As part of effort for Korea Post to allocate part of global investment assets to KIC, both agencies agreed to discuss details during the first half of this year, including the manner in which joint investment and asset allocation will be made,” KIC said in a statement.

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Singaporean Sovereign Wealth Capital Participates in DoorDash Series F Round

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San Francisco-based DoorDash Inc., a food delivery company, raised US$ 400 million in a Series F investment round. The investment round was led by Singapore’s Temasek Holdings and San Francisco-based Dragoneer Investment Group, LLC. Post-raise, DoorDash has raised US$ 1.4 billion in equity capital. This gives DoorDash a post-money valuation of US$ 7.1 billion. DoorDash competes against publicly-traded company Grubhub, Postmates, and UberEats, a service of Uber Technologies.

Other investors in the Series F round include SoftBank Vision Fund (managed by SoftBank Group), DST Global, Coatue Management, Singapore’s GIC Private Limited, Sequoia Capital, and Y Combinator.

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CPPIB and Sterling Partners Exit Livingston International

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Canada Pension Plan Investment Board (CPPIB) and U.S. private equity firm Sterling Partners are exiting their investment in Livingston International Inc., an international trade-services firm based in Toronto, Ontario, which specializes in customs brokerage, freight forwarding, and trade consulting. Livingston International is Canada’s largest customs broker and third-largest entry filer in the United States.

U.S. private equity firm Platinum Equity is buying Livingston International from CPPIB and Sterling Partners. Platinum Equity is a private equity firm founded by Tom Gores in 1995.

Livingston International was founded in 1945 by Gerry Livingston. In 2002, the company went public after backing from CAI Capital Partners. In 2010, CPPIB and Sterling Partners acquired the company for US$ 324 million. On May 8, 2012, Livingston International acquired New Orleans, Louisiana-based M.G. Maher & Company, Inc. and MCLX, Inc. Maher is an international freight forwarder, customs broker and logistics provider. In 2013, the owners of Livingston International refinanced debt raising US$ 555 million in senior secured credit facilities.

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