Paul Odunewu, a former expatriate employee of MTN Group, has filed a further-counter-affidavit before the Court of Appeal, Lagos Division, opposing the telecom giant’s Stay of Execution Motion dated November 27, 2017, which was submitted by Prof. G. Elias & Co., their counsel.
The appeal was scheduled for June 4 and subsequently July 10 by the Court of Appeal, Lagos. MTN Counsel, however, objected in writing to each date, citing the unavailability of their solicitors.
The first, second, and third appellants in the nearly seven-year-old appeal that took more than ten years to get from the Lagos State High Court to the National Industrial Court of Nigeria (NICN) before a decision was rendered on September 27, 2017, are MTN Group Limited, South Africa (MTNG); MTN Nigeria (MTNN); and MTN International, Mauritius (MTNI).
According to the trial court’s ruling, which was given by Justice Oyejoju Oyewunmi at the NICN, Akure, the dismissal of the former Network Group Operations Manager on February 28, 2006, was both intentional and wrongful.
According to him, MTN Group is the parent firm of MTNN and MTNI, acting as their lifeline and making up a vital component of both businesses.
The court further determined that MTN Nigeria lacks independent authority to carry out its contractual obligations with Mr. Odunewu without first obtaining MTN Group approval.
“Except the issue of costs which is to be paid by all the defendants (MTN sic)”, NICN had directed that the second and third defendants (MTNN & MTNI) pay the judgement sums of $13.47 million, N2.54 million, and £10,000.
The Telecom and IT news reports that the trial judge had mandated that MTN make the payments within 30 days, or else the amounts would accrue interest at the rate of twenty-one percent annually.
A lawyer at Prof. A. B. Kasunmu’s Chambers named Damilola Osibanjo deposed in a Further-Counter-Affidavit filed on July 2, 2024: “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 judgment debt and default interest accruing.
“As of 31st December 2023, MTN Nigeria reported provisions for litigation of N17.025 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 the provision.
“The litigation provisions of N17.025 billion (or US $18.77 million at an exchange rate of N907.1: $1 as of 31st December 2023) is inadequate to meet MTNN legal obligations and accruing default interests in Nigeria.
“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 has 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 by 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 regularise their Appeal has caused substantial delays in prosecuting this appeal to determination.
“I know that MTN is stalling the 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.
“To the ultimate benefit of the South Africa-based MTN Group, MTN has engineered heavy losses in Nigeria through assets stripping and heavy borrowing which left the MTN Nigeria shareholders’ funds at a hefty deficit of N434.7 billion as at the three-month period ended on 31st March 2024 worsen from a deficit of N45.4 billion as at year ended on 31st December 2023.
“MTN losses in Nigeria worsen to N392.7 billion over the first three months of 2024, and the currency loss also worsens significantly to N656.4 billion for the said three-month period at a reported exchange rate of N1309.39: $1.00.
“MTN Nigeria reported, for the year ending 31st December 2023, a pre-tax loss of N177.8 billion which resulted in a wipeout of shareholders’ funds from revenue of N2.469 trillion, and an EBITDA (operating profit) of N773.66 billion.
“MTN Nigeria attributed the losses to massive currency loss of N740 billion, at an exchange rate of N907.1: $1, arising mainly from leases (N367.4 billion currency loss) and borrowings (N241.7 billion currency loss).
Continuing, “From startup in 2001 till 31st December 2023, MTN Nigeria reported a cumulative total revenue of about N18.141 Trillion from Nigeria at an operating profit (EBITDA) of, at least, N8.35 Trillion.
“As of the year ended on 31st December 2023, MTN Nigeria reported a Liability of circa N3.23 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 the date of fund transfer to a bank account in the name of the Chief Registrar of the Court/Paul Odunewu,” he added.
Among other persuasive facts, the following one supported the motion:
● “MTN are running their operations in Nigeria with a riskier financial structure (characterised by higher Leverage, worse Liquidity, and worse Solvency) in 2021 than in 2014 (before the 2015 Nigerian Communications Commission (NCC) Fine of N330 billion (or US$1.1 billion).
● “MTN Group received US$399.59 Million (N148.19 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 N17.623 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 for twelve years.
● “From 2006 to 2016, MTN repatriated $13.92 billion in the guise of dividends/profit, repayment of loans, and licenses/management fees.
● “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 judgment 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 per cent control at start-up and IHS the remaining 49 per cent.
“The leaseback agreements between MTN Nigeria and the IHS Group were indexed in US Dollars.
“MTN Group is the largest shareholder of the IHS Group in which it owns a 26 per cent stake and the ultimate beneficiary of the MTN Nigeria leaseback agreement with the IHS Group.”
