Shareholders of Crystal Telecom are demanding that MTN Rwanda upholds compliance in all state laws and regulations to avoid unnecessary fines and penalties.
Crystal Telecom has a 20 per cent equity stake in MTN Rwanda, which has been floated on the local bourse through Rwanda Stock Exchange.
During an Annual General Meeting held Tuesday, the shareholders were told that they would not be getting any dividends on their investment after MTN Rwanda posted a loss of Rwf8.5 billion in 2017.
The loss was occasioned by significant charges of Rwf15.5 billion from penalties by the regulator, Rwanda Utilities and Regulatory Authorities (RURA), as well as tax authorities.
Tax audits by the Rwanda Revenue Authority (RRA) for the years 2011, 2012 and 2015 led to a tax discrepancy of over Rwf12 billion, which the telco is expected to pay.
So far, they have made a provision of Rwf6.8 billion and have lodged an appeal to challenge the assessment by RRA.
In April last year, RURA imposed a Rwf7 billion fine on MTN Rwanda Ltd over non-compliance with licensing obligations by the latter.
According a statement from the regulator, MTN breached licensing obligations by hosting its IT services outside the country.
Shareholders demanded increased compliance with all national laws and regulations saying that failure to do so was costing them dividends and a drop in the share value.
Speaking at the meeting, Robert Kamugisha, a shareholder, expressed concern and questioned what Crystal Telecom management is doing in order to ensure compliance by the firm.
Another shareholder, Alfred Munanura, asked what safeguard mechanism as well as oversight provisions had been put in place by Crystal Telecom management to avoid the re-occurrence of MTN Rwanda fines and penalties.
Crystal Telecom has two seats on the MTN Rwanda board.
Safeguards
Evelyn Kamagaju, the chairperson of the Board of Directors of Crystal Ventures – the holding company for Crystal Telecom – said that to ensure compliance in regards to taxes, MTN Rwanda has hired a full-time tax consultant to make regular checks and follow ups to avoid fines in the future.
The Crystal Telecom shares are currently traded at Rwf54 down, from Rwf90 in April last year.
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