The House of Representatives Committee on Communications has commended steps taken by the Nigerian Communications Commission (NCC) and the Central Bank of Nigeria (CBN) to facilitate the amicable resolution of the debt crisis faced by Etisalat Nigeria.
The committee also noted the successful commencement of the transitional arrangements which has led to the emergence of a new CEO and Board to stabilise the company, and to ensure that it continues to provide uninterrupted services to its subscribers.
A statement from the Office of the Executive Commissioner, Stakeholders Management of the NCC, Mr Sunday Dare, noted that the Hon. Saheed Fijabi-led Committee had invited the NCC management to explain the rationale for NCC’s intervention and to clarify its role in the matter.
It said Dare led the NCC team to the briefing and informed the committee that the CBN and the NCC had intervened to ensure that service to Etisalat’s over 20million subscribers was not disrupted.
Dare said the intervention was to avoid negative impacts on other strategic sectors of the economy such as businesses, banking and financial services and security operations that rely on Etisalat’s network; preserve investors’ confidence in Nigeria as an investment destination; and protect the interests of about 4000 Nigerians employed directly by Etisalat and indirectly along its value chain, such as its suppliers, distributors and value added service providers.
He noted that following Etisalat’s failure to meet its debt payment obligations, the creditor banks had commenced moves to take over the company in exercise of their contractual rights to recover the debt. Although the parties had reached understanding in March 2017 to maintain the company as a going concern, the withdrawal of the Emirates Telecommunications Group Plc. from Etisalat Nigeria in June 2017 (following the parties’ inability to reach an amicable resolution) had precipitated a crises, which demanded the immediate action by the NCC and CBN to prevent the company from being liquidated.
Dare acknowledged the pivotal role played by the CBN to ensure that parties reach an amicable resolution which included the appointment of a new interim CEO and CFO for Etisalat, as well as the reconstitution of the company’s Board of Directors. He further informed the Committee that during the transitional period, Etisalat’s new Board and Management are expected to conclude arrangements on the injection of fresh capital into the company and settlement of its due obligations to its facilities and services providers, amongst others.
During the interaction, members of the committee expressed concerns over issues, such as the possibility of job losses, the probability of systemic distress within the industry, and the need to hold persons responsible for corporate failures accountable. They therefore encouraged the Commission to carry out a comprehensive evaluation of industry health which would guarantee overall industry stability and avoid systemic collapse.
Dare added that the Commission would shortly launch a three-pronged action plan focusing on the conduct of regular/robust health checks on all licensees covering financial, technical and commercial viability; the monitoring of business continuity and recovery plans, as well as the aggressive enforcement of the NCC’s Code of Corporate Governance which was made mandatory in November 2016.
The Board of the Commission had earlier in the day directed that these actions be commenced without delay, whilst endorsing the other actions taken by the NCC Management on the Etisalat issue.