A lawsuit filed by the Nigerian government in order to prevent MTN from moving funds from its bank accounts in Nigeria to foreign countries pending the determination of a US$3.9 billion fine against the mobile operator has failed. The case, which was brought before a court sitting in Lagos by Nigeria's Attorney General and Minister for Justice Abubakar Malami, has now been thrown out.

Justice Idris Mohammed refused to grant Malami's request which accused MTN of habitually repatriating its funds out of Nigeria. The attorney general argued that MTN had previously moved almost US$1 billion out of Nigeria to accounts in the Cayman Islands, British Virgin Islands and Mauritius.

MTN's victory means that they escape what would have been an order for 21 Nigerian banks that keep MTN's funds to open a special interest-yielding account in the name of the Chief Registrar of the Federal High Court and transfer NGN1.04 trillion of MTN's funds.

In passing judgement on the application Justice Mohammed said the attorney general failed to satisfactorily prove that MTN was planning to move funds out of the West African country.

Smart moves

Industry analysts believe the office of the Attorney General decided to apply for the request because of rumours that the operator is using the lawsuit it filed regarding the NCC fine to buy time and move funds out of Nigeria.

"MTN is a very smart company and they really know what they are doing, they have very good international lawyers. If they are after a reduction in fine, they would have filed the lawsuit long before the expiration of the deadline. Observant ones in the industry know that MTN is just buying time with the lawsuit while it moves its funds out of the country," said Wale Ladipo, a telecoms industry expert.

Commenting on the move of the Nigerian government, finance expert Kemi Adesayo believes the government should have avoided engaging the court and rather adopted a policy strategy.

"I believe there are channels the government through the Central Bank of Nigeria (CBN) could take to ensure that money is not moved out of the country indiscriminately. It could introduce new policies including transfer limits and stricter conditions. Let's hope it realises this before MTN moves all of its money out of Nigeria," she said.

Adesayo added that if nothing is done to block the repatriation of funds by the operator, it may have significant impacts on the nation's economy.

"People may lose jobs and the company may just decide to leave Nigeria or sell its company in the country. This could create major confusion and shake off in the ecosystem. Nigerian government should be smarter and more strategic in handling this matter," she concluded.