Legal reviews directed by Nigerian experts have raised warnings with both Shanduka and MTN – two organizations Cyril Ramaphosa has been vigorously engaged with.
Shanduka was the President’s venture organization. As detailed by AmaBhungane, they got freedom from Standard Chartered Bank in Nigeria to put almost $11 million into the country’s MTN tasks.
Now, that particular exchange is relevant because Cyril was previous a non-executive director for MTN. The government of Nigeria believe there was “an irregular clearance issue” that is in contravention of the country’s capital control laws.
What role did Cyril Ramaphosa have at MTN?
AmaBhungane state that Ramaphosa will have to answer questions about what he knew in terms of the regulatory risk.
Shanduka sold their stake in the investment to the Public Investment Corporation (PIC). That turned out to be a woeful investment for them, however. At the time of purchase, the stake was worth R2.8 billion. As of 2017, those shares were down to R996 million.
In a statement issued by the PIC, they confirmed that they are doing everything they can to avoid something similar happening in the future
“The Public Investment Corporation (PIC) can confirm that it acquired MTN Nigeria shares through Over The Counter (OTC) market in Nigeria. The shares were purchased in 2015 for USD 230.993 million.”
“Following this investment, MTN was fined for not complying with regulations in that country… We are now comforted that MTN has taken steps to strengthen regulatory compliance and risk management to prevent a repeat of what happened.”
MTN pay the price for bending the rules
Much of the loss in value was due to the massive fine imposed on MTN in October 2015 for violations of Nigerian subscriber registration rules.
Ramaphosa withdrew from both Shanduka and his role with MTN not long after he became Deputy President in 2014.