The Advertising Regulatory Council of Nigeria says it has begun a preliminary investigation into an alleged N1bn debt against 9mobile.

In a phone interview with The PUNCH, ARCON Director-General, Dr Olalekan Fadolapo noted the body has begun a probe of the telecom operator, whom he affirmed was cooperating, stating, “We have commenced an investigation. We’ll look into the issue and make appropriate pronouncements at the appropriate time.”

In a statement on May 30, ARCON’s DG announced it would open an investigation after it received two petitions accusing 9mobile of owing N1bn for advertising services, ditching the indebted advertising agencies and seeking new agencies to open accounts with.

It read: “ARCON has received two petitions against Emerging Markets Telecommunications Services Limited (trading as 9mobile), a member of the Advertisers Association of Nigeria, relating to its long-overdue indebtedness of N1bn for advertising services.

It further read, “ARCON will investigate the movement of the account from the agencies owed to the new agencies briefed to ascertain compliance with disengagement protocol as well as possible breach of ethical procedure.”

ARCON explained that its investigation was in line with its Advertising Industry Standard of Practice on payment threshold, industry credit policy, and protection of copyright/intellectual property ownership.

However, ADVAN had denounced the AISOP bylaws of ARCON. In 2023, ADVAN reportedly insisted that AISOP should not determine commissions and payment terms for advertisers, arguing that legislating payment terms goes against global standards.

Speaking on the probe’s timeline, ARCON’s DG said that the investigation “may not last more than a week and it will be resolved,” as he revealed that 9mobile was cooperating with the investigation.

He said, “9mobile is a responsible organisation, at least to the best of my knowledge. They are cooperating with us. And even in their own words, they want to put this behind them.”

Fadolapo stated that the telecom company was “doing everything legally possible to put this behind them,” adding that the parties involved could work together “without throwing tantrums at each other.”

ARCON added that it does not want a media judgement, stating, “We need to sit down and do the reconciliation. We are not saying anybody is guilty until we complete the investigation. We also want to do damage to the brand and everybody involved.”

The PUNCH contacted 9mobile but got no response across all channels.

Meanwhile, the President of the ADVAN, Osamede Uwubanmwen, disagreed with ARCON’s notice of a probe, arguing that it was hurtful to the 9mobile brand. He declared that ADVAN will protect 9mobile’s interests.

Uwubanmwen said, “We are not happy with the notice from ARCON. We feel that it’s better to have a report of an investigation than to let the whole world know you are investigating a brand. It’s a communication that should have been delayed until after the investigation.

“Brands have spent millions of naira to build their name. We are very conscious of it. That communication does not do anybody any good, not the advertiser or the regulator.”

However, Uwubanmwen agreed with ARCON’s DG on the need to have a reconciliation of accounts: “For the claims of money, you always ask for a reconciliation, saying, ‘What are we owing?’”

He stated that sometimes advertising agencies allege indebtedness, but “when you ask them to bring their documents in, it becomes a problem.”

Further, Uwubanmwen maintained that ARCON’s AISOP should not regulate ADVAN members’ contracts. He asserted that ADVAN, through its representative on the AISOP committee, Bunmi Adeniba, went on record to withdraw assent to the AISOP bylaws, stating that she did not sign the document that the committee eventually produced.

ADVAN’s president decried the use of AISOP to regulate contractual agreements, citing a similar case where ARCON sought sanctions against Hayat Kimya Nigeria Ltd, a subsidiary of Turkish enterprise Hayat Holdings.

In 2022, ARCON threatened to sanction Hayat Kimya for owing N489m to a national media planning and buying agency, Mainsail Media Ltd.

ARCON’s DG responded to ADVAN’s dissent, maintaining that it has the power to investigate financial transactions in the advertising sector.

He said, “ARCON has the power to investigate all transactions relating to advertising, advertisement and marketing communication, including requesting critical information for financial information as it is maintained. It is in the function and the mandate as stated in the ARCON Act.

Nevertheless, Fadolapo noted that an advertiser like 9mobile is allowed to appeal its investigations. He concluded that “If you are doing advertisement and marketing communication, you are under obligation to respect the law, ADVAN or not.”