JOHANNESBURG (Reuters) – Shares in South African telecoms giant MTN jumped 8 percent on Thursday after it settled a row with Nigeria’s central bank for a fraction of the $8.1 billion it had threatened to cost.

MTN announced on Monday that it would pay just $52.6 million to end the dispute in Nigeria, its biggest and most lucrative market, but also its most troublesome.

The case had dogged MTN, Africa’s biggest telecoms company, for four months, dragging its share price down 20 percent to hover around its lowest level since 2009 while also sparking pessimism around the ease of doing business in Nigeria.

It centred on allegations that dividends paid by the firm between 2007 and 2015 were based on improperly issued certificates.

The Central Bank of Nigeria (CBN) had initially ordered MTN and its lenders to bring back $8.1 billion it alleged the company had illegally repatriated to South Africa during that time.

But after MTN provided additional documents, the central bank concluded only one 2008 private placement, worth around $1 billion, was irregular. MTN agreed to pay $52.6 million as a “notional reversal” of this transaction.

“MTN Nigeria will pay the notional reversal amount without admission of liability,” it said in a statement on Monday, announcing the settlement.

The central bank’s initial order threatened to wipe out more than half of MTN’s market capitalisation at the time it was issued in August, and spooked investors just as the company was trying to reassure them of its frontier market-focused strategy after a series of costly legal problems.

MTN shares were up 4.34 percent to 89.21 rand at 1055 GMT on Thursday, after rising more than 8 percent to highs of 93 rand in the first trading session since the settlement was announced.

DIFFICULT MARKET

MTN is Nigeria’s biggest operator, with 52.3 million users in 2017, and the country accounts for one third of the firm’s annual core profits. But it has also proven problematic.

While the settlement marks a turning point in MTN’s fortunes in the country, the telecoms heavyweight still has to fight a $2 billion tax bill from Nigeria’s attorney general.

It also comes two years after the firm paid $1 billion for missing the deadline to cut off unregistered SIM cards – a fine that prompted its first ever annual loss.

MTN was also previously accused of illegally repatriating $14 billion to its parent company, but was cleared of the allegations.

The latest dispute cemented concerns about firms’ ability to effectively operate in Nigeria, where a sluggish economy, strained public finances and upcoming elections have also left some questioning the motives behind such cases.

“Why did it take the CBN several years to ‘discover’ this and confront MTN?” said Dobek Pater, a director at consultancy Africa Analysis, adding this at least suggests negligence or a lack of competence at the central bank.

“Sometimes the government (government organisations’) interpretation of the law/regulations can be speculative to suit their ends,” he told Reuters via email.

Reporting by Emma Rumney; Editing by Louise Heavens and Adrian Croft