International relations & co-operation minister Naledi Pandor has come out in support of MTN and Tiger Brands, which are facing a slew of legal challenges in Cameroon.
This is the second time that Pandor has had to come to MTN’s aid in 2023.
The mobile operator was involved in a R13bn tax dispute with Ghanaian tax authorities at the start of the year, and the minister had to intervene, calling “on the parties involved to do everything possible to find an amicable solution”.
MTN, which operates in 18 countries, is no stranger to locking horns with governments. This latest row is likely to remind investors of the group’s run-ins with authorities in Nigeria in the past five years. Those did not bode well for its investment case, but they were eventually resolved.
SA businesses appear to be subjects of a targeting campaign in the Central African country.
Freezing
According to Pandor’s department, on April 14 the minister was briefed by senior executives of two companies, Tiger Brands’ Chococam and MTN, who reported on actions by the courts in Cameroon that have affected their operations.
The companies reported the illegal freezing of their bank accounts since September 2022. They further mentioned that despite extensive efforts to seek legal recourse, they had not been successful.
In a statement, the international relations & co-operation department confirmed the minister had also met her counterpart in Ghana in April and had expressed concern over the treatment of SA businesses in that country.
MTN has confirmed that actions by the courts in Cameroon affected the group’s operations in that country.
This is part of a long-running “dispute between two parties to which MTN has no relation or dealings in Cameroon”.
The real dispute appears to be between FNB and Bestinver — a group of four Cameroonian companies.
“It is utterly astounding that MTN is being brought into this issue, which is one apparently between Mr Ahmadou Baba Danpullo and First National Bank,” said MTN group chief sustainability and corporate affairs officer, Nompilo Morafo.
“From the outset, we have pursued all legal channels to resolve this bizarre situation in which we find ourselves caught up, but to no avail.”
According to Business Report, FNB has, for a number of years, seized and auctioned some of Danpullo’s properties in SA. These sales were in order to settle debts the businessman was unable to pay since 2019.
After making a case that Danpullo’s was unfairly discriminated against in SA, a Cameroonian judge authorised seizure of bank accounts and assets of MTN, Broadband Telecom (an MTN shareholder), Mobile Money Corporation, and Chococam, to recover “funds maliciously diverted” by FNB.
In September 2022, several of MTN Cameroon’s banking partners were served with a garnishee order on MTN Cameroon’s accounts at the request of the Bestinver Group.
“The four companies informed our banking partners that they were seeking to recover the sum of XAF 259.2-billion in a dispute they supposedly have with the bank based in SA which is completely unrelated to MTN Cameroon,” MTN said.
“The companies claim that the South African bank has a common shareholder with MTN Cameroon, which is not the case. They therefore seek their recourse on MTN Cameroon, in Cameroon on a private commercial matter that they have engaged in, in SA.”
Though Pandor remains hopeful that the matters will be “addressed positively” in line with the deliberations she had with her counterpart, she has been made aware of new developments among which is an order to MTN and Tiger Brand’s banking partners to release the garnished funds to an escrow account administered by the registrar of the court.
“In view of the illegality of the garnishee orders, this step is considered by the two companies to be yet another irregular action taken by the courts at the instance of one party in the legal dispute,” Pandor said.
All this appears to have soured relations between SA and Cameroon, with the department saying: “These latest developments will challenge the extent and appetite for investments into Cameroon, thus the minister called for the need for further explorations to resolve the attendant matters.”
For some time there has been a feeling in the market that multinationals, including several JSE-listed firms, are becoming easy targets for governments looking for cash.
The minister has also been briefed by Vodacom executives regarding challenges they are experiencing in the Democratic Republic of Congo (DRC).
Vodacom is involved in a case in the DRC in which the government says it is owed $243m in taxes. According to Bloomberg, the disagreement relates to an audit for 2016-19.
Pandor has advised that SA companies continue pursuing all legal avenues available.
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