Former expatriate staff of the MTN Group, Mr. Paul Odunewu, has filed a further-counter-affidavit at the Court of Appeal, Lagos Division, in opposition of the telecommunications giant’s Stay of Execution Motion dated 27th November 2017 filed by their Counsel – Prof G. Elias & Co.
The Court of Appeal, Lagos, listed this Appeal for Motion on the 4th of June 2024 and later the 10th of July 2024. However, MTN Counsel wrote to the Court opposing each date on the ground that their Lawyers were not available.
MTN Group Limited, South Africa (MTNG); MTN Nigeria (MTNN) and MTN International, Mauritius (MTNI) is the first, second, and third Appellant respectively, in this almost seven-year-old Appeal which had lasted more than 10 years from the Lagos State High Court to the National Industrial Court of Nigeria (NICN) before judgement was delivered on 27 September 2017.
In a judgement delivered by Honourable Justice Oyejoju Oyewunmi on September 27, 2017, at the NICN, Akure, the trial Court had found that termination of the employment of the former Network Group Operations Manager on February 28, 2006, was wrongful and malicious; and that MTN Group is the Parent Company and the life wire of both MTNN and MTNI that controls them and thus integral part of both companies. Also, MTN Nigeria has no power of its own to act under its contractual agreement with Mr. Odunewu except as approved by its Parent Company, MTN Group. NICN had ordered that the judgement sums of $13.47 million, ₦2.54 million, and £10 thousand be paid by the second and third defendants (MTNN & MTNI), “except the issue of costs which is to be paid by all the defendants (MTN sic)”. The trial judge had ordered MTN to make the payments within 30 days, failing which the sums would appreciate at 21 percent interest per annum.
Meanwhile, in a Further-Counter-Affidavit filed on July 2, 2024, one Damilola Osibanjo, a Lawyer at Prof A. B. Kasunmu’s Chambers, deposed that the “Applicants” (sic MTN) set up complex legal and financial structures to ensure that enormous revenue and profit generated by MTNN do not stay in Nigeria and is not available to pay the judgement debt and default interest accruing. “As of 31st December 2023, MTN Nigeria reported provisions for litigation of ₦17.025 billion for court cases between the 2nd Applicant and various bodies. MTNN treats default interest accruing over time as finance cost which they do not include in provision.
The litigation provisions of ₦17.025 billion (or US $18.77 million at an exchange rate of ₦907.1: $1 as of 31st December 2023) is inadequate to meet MTNN legal obligations and accruing default interests in Nigeria.
Osibanjo deposed: “I know that the entire appeal is a masterful delay tactic, shrewdly designed by MTN to deny Mr. Odunewu from enjoying the fruit of the judgement. I know that MTN have been persistently contriving sham excuses not to prosecute this appeal expeditiously and diligently as contemplated by the ruling of this honourable Court on the 18th of October 2018 when the court directed that the Motion for Stay of Execution shall abide the determination of this Appeal, which was adjourned to 27th February 2019. This honourable Court heard and ruled on the 18th of October 2018, 15th of July 2020, 2nd of November 2020, and 22nd of February 2022 the three separate motions of MTN for leaves to amend and further amend the originating Notice of Appeal. I know that the prevarication of MTN to regularize their Appeal has caused substantial delays in prosecuting this appeal to determination. I know that MTN are stalling determination of this appeal by probating and reprobating on the same issue with their contentions of the competence of Mr. Odunewu’s Notice of Preliminary Objections filed on 13 April 2022 and his Motion on Notice to Amend the Respondent Brief filed on 5th October 2022.”
Osibanjo deposed: “To the ultimate benefit of the South Africa based MTN Group, MTN have engineered heavy losses in Nigeria through assets stripping and heavy borrowing which left the MTN Nigeria shareholders’ funds at a hefty deficit of ₦434.7 billion as at the three-month period ended on 31st March 2024 worsen from a deficit of ₦45.4 billion as at year ended on 31st December 2023.
MTN losses in Nigeria worsen to ₦392.7 billion over the first three months of 2024, and the currency loss also worsens significantly to ₦656.4 billion for the said three-month period at a reported exchange rate of ₦1309.39: $1.00.”
“MTN Nigeria reported, for the year ending 31st December 2023, pre-tax loss of ₦177.8 billion which resulted in a wipeout of shareholders’ funds from a revenue of ₦2.469 trillion, and an EBITDA (operating profit) of ₦773.66 billion. MTN Nigeria attributed the losses to massive currency loss of ₦740 billion, at an exchange rate of ₦907.1: $1, arising mainly from leases (₦367.4 billion currency loss) and borrowings (₦241.7 billion currency loss). From startup in 2001 till 31st December 2023, MTN Nigeria reported a cumulative total revenue of about ₦18.141 Trillion from Nigeria at an operating profit (EBITDA) of, at least, ₦8.35 Trillion. As of the year ended on 31st December 2023, MTN Nigeria reported a Liability of circa ₦3.23 Trillion.”
“I know that Mr. Odunewu filed a Motion on Notice dated 08 January 2020 for an order of this honourable Court to compel MTN to deposit the judgement debt and accruing default interest till date of fund transfer to a bank account in the name of the Chief Registrar of the Court/Paul Odunewu. The said motion was supported by the following cogent facts, among others:
a) MTN are running their operations in Nigeria with riskier financial structure (characterized by higher Leverage, worse Liquidity, and worse Solvency) in 2021 than in 2014 (before the 2015 Nigerian Communications Commission (NCC) Fine of ₦330 billion (or US$1.1 billion).
b) MTN Group received US$399.59 Million (₦148.19 billion) in December 2019 as redemption of its preference shares investment of US$2.012 Million injected into MTN Nigeria in November 2007, which reduced share capital of MTNN to ₦17.623 billion in 2019 compared to ₦65.145 billion in 2018. For every US$1.00 investment in 2007 MTN Group redeemed US$ 198.51 in 2019 as well as annual dividends during the period of twelve years.
c) From 2006 to 2016, MTN repatriated $13.92 billion in the guise of dividends/profit, repayment of loans and licenses/management fee. Whereas MTN injected a total capital inflow of $1.24 Billion for their operations in Nigeria for the period 2001 – 2016. As of 2016, MTN were repatriating US$11.00 for every US$1.00 that they injected into their business in Nigeria.
That it is now in the interest of justice for this honourable Court to hear the Stay of Execution Motion or order MTN to deposit the judgement debt and accruing default interest till date of fund transfer to a bank account in the name of the Chief Registrar / Mr. Paul Odunewu.”
“MTN have engaged in asset stripping by selling off the most valuable and profitable network infrastructure of MTN Nigeria to the pan-African telecoms infrastructure provider, IHS Holding Limited (“IHS Group”), in 2014 and then leaseback the towers for the MTNN operations in Nigeria. The business resulting from the acquisition of the MTNN towers in 2014 is INT Towers Limited wholly owned by Nigeria Tower InterCo B.V. in which MTN Group had a 51% control at start up and IHS the remaining 49%. The leaseback agreements between MTN Nigeria and the IHS Group were indexed in US Dollar. MTN Group is the largest shareholder of the IHS Group in which it owns 26% stake and the ultimate beneficiary of the MTN Nigeria leaseback agreement with the IHS Group.”
