A Cameroon court has ordered banks used by MTN to transfer its funds into escrow over a dispute between South African lender First National Bank and Cameroonian businessman Ahmadou Baba Danpullo, which MTN says has nothing to do with it.
- The order, dated 9 June, marks an escalation of a conflict that had already frozen MTN’s access to local accounts, and MTN says it has pursued all legal channels to resolve the situation, but to no avail.
- African wireless carriers have been hit with an increasing number of legal, regulatory, and tax disputes, curbing investor appetite on the continent at a time when major capital outlays are needed to keep up with growing demand.
- MTN is Africa’s largest wireless carrier and has about 12 million clients in Cameroon, representing more than half of the local market. It says it has been targeted in the dispute because South Africa’s national pension fund, the Public Investment Corporation (PIC), is a shareholder in both First National Bank and MTN.
- The move poses a serious risk to the continuation of MTN’s business in Cameroon, and the South African foreign ministry has expressed concern over the order, saying it will challenge the extent and appetite for investments into Cameroon.