Mobile telecoms giant MTN has lost almost a third of it’s value since last Thursday.
The company’s share price has fallen over 30% since its Nigerian office was accused of violating foreign exchange regulations by repatriating dividends amounting to 8-point-1 billion US dollars, between 2007 and 2015.
Nigerian authorities now claim that MTN did not pay at least 2 billion dollars in taxes. MTN has refuted the claims, saying it will engage the relevant authorities.
The firm’s Nigerian business makes up a third of its annual profit.
Analysts say the latest developments will lead to Nigeria being perceived as a risky market for business.
Makwe Masilela of Makwe Fund Managers says: “I think it’s more a reflection of Nigeria as a country. Do you really want to do business there and also in the past they denied any wrong doing so there is still a story there.”
Masilela thinks that Nigeria is still a lucrative business for MTN and that the company is not likely to exit that country any time soon.
“It’s a very lucrative market for them. I don’t think they will just walk away they can still make good money if they are focused and even for the likes of Shoprite but only if they get it right.”
The latest news comes two years after MTN was made to pay 1 billion US dollars over unregistered sim cards.
The company was also hit by US president Donald Trump’s sanctions on Iran making it difficult for it to repatriate funds from that country.
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