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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.

White House Nominates Heath Tarbert for CFTC Chairman

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The White House announced Heath P. Tarbert will be nominated to serve as Commissioner and Chairman of the Commodity Futures Trading Commission (CFTC). Tarbert currently serves as Assistant Secretary for International Markets at the U.S. Treasury Department. Before joining the U.S. Treasury, Tarbert was a Partner at law firm Allen & Overy. Tarbert was confirmed by the U.S. Senate for his current Treasury post at 87 (yes) to 8 (no).

Upon Senate confirmation, Tarbert’s CFTC term would start on April 14, 2019 and last for five years. Tarbert is taking over from J. Christopher Giancarlo whose term ends in April 2019. Tarbert will need a U.S. Senate confirmation to take the head CFTC post.

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KIA Could Sell Stake in North Sea Energy Business

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The Kuwait Investment Authority (KIA), through its unit Wren House Investment Management, is nearing a deal to sell a 40% stake in its North Sea energy business to JPMorgan Asset Management. In July 2018, KIA closed on a deal to acquire oil and gas pipeline firm North Sea Midstream Partners from ArcLight Capital.

More details to follow –

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Pensioenfonds PGB Hires BMO Global for Equity Protection Strategy

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Pensioenfonds PGB is a Dutch multi-sector pension fund. PGB awarded a mandate to implement a protection strategy for its €12 billion equity portfolio to BMO Global Asset Management. PGB is a €26.5 billion fund. PGB has been using BMO Global’s responsible engagement overlay since 2017.

The Chief Investment Officer of PGB is Harold Clijsen.

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