Despite a continuing court-ordered seizure of its bank accounts, MTN Cameroon, a subsidiary of South Africa’s MTN Group, has pledged to continue operating in the Central African nation.
The accounts, which contain more than 14 billion CFA francs (about $23.72 million), have been frozen since September 2022 due to a legal dispute between First National Bank (FNB) of South Africa and business tycoon Ahmadou Baba Danpullo of Cameroon.
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Genesis of the legal battle
The controversy started when FNB liquidated Danpullo’s South African holdings after a real estate loan default.
Danpullo retaliated by going after other South African companies doing business in Cameroon, such as MTN and Chococam, a division of Tiger Brands, in an attempt to recoup his losses.
Danpullo bases his case on the assertion that the Public Investment Corporation (PIC) of South Africa, which owns shares in FNB, has substantial holdings in MTN Cameroon and Chococam.
MTN Cameroon denies involvement in the disagreement
MTN Cameroon, on the other hand, has adamantly denied any involvement in the disagreement, claiming that PIC is not a shareholder in the business and that the identities of the company’s stockholders are publicly available in Cameroonian courts.
MTN Cameroon CEO Mitwa Ng’ambi expressed regret over the development, saying, “We do not understand how we have been brought into this matter that we are not even remotely involved in.”
She continued by saying that the circumstance has hurt the business’s operations and diverted funds from its primary goal of offering digital solutions in Cameroon.
Ng’ambi stated, “This case poses a serious distraction from our business purpose,” adding that MTN has been compelled to take legal action to challenge the court’s ruling.
Due to the blocked funds necessary for day-to-day operations, MTN is facing progressively more challenging circumstances to continue paying its 200,000 distribution agents and over 800 staff.
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What this portends for the Cameroon business environment
The case demonstrates that Danpullo’s influence since his actions prevented MTN from accessing funds and raised the possibility of legal trouble and scrutiny for other South African businesses operating in Cameroon.
The case highlights more general concerns about the economic climate in Cameroon and the possible dangers for foreign investors as MTN persists in its challenge to the court ruling.
MTN claims that it is still focused on taking legal action to stop what it views as an “imminent miscarriage of justice.”