Phuthuma Nhleko, the new chief executive officer (CEO) of MTN Group, has hinted that the telecommunications company may not pay the entire N1.04tr fine of the Nigerian Communications Commission (NCC).
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Nhleko, 55, agreed to switch from non-executive to executive chairman for a maximum of six months after Dabengwa took responsibility for the fine and resigned.
“They have to pay the fine, I agree that if the Nigerian government insists on collecting that fine in one fell swoop, it could affect MTN’s commercial… their financial position, I agree”.
His resignation letter read in part, “Due to the most unfortunate prevailing circumstances occurring at MTN Nigeria, I, in the interest of the company and its shareholders, have tendered my resignation with immediate effect”. But an NCC official told Daily Trust that the federal government is only interested in seeing the fine paid.
“We expect an eventual compromise to sharply scale back the size of the penalty (to less than half the original amount), especially as MTN takes concrete steps to address the regulator’s concerns”, it said in a published note.
The board of directors and risk and compliance departments should have prevented the company from falling foul of regulators, the money manager’s Chief Executive Officer Dan Matjila said in a statement.
Shares in MTN have slid by almost 20 percent since 26 October when the charge was first reported, but were up 1.4 percent at 159.65 rand by 1349 GMT on Monday, following news of Nhleko’s appointment.
“The board chose Nhleko because of his vast experience in Nigeria and his in depth knowledge of the company”, MTN’s spokesman Chris Maroleng said.Dabengwa had been chief executive of MTN since 2011 when he took over from Nhleko.
According to Punch, the sources said that a reversal in earlier losses of the company’s shares on Monday was an indication that the NCC might have finally reached a truce with MTN.
“Obviously having only six months he’s there to do something about the fine”, Momentum SP Reid analyst Sibonginkosi Nyanga said. He told South Africa’s Radio 702 on Monday that he planned to resolve the matter within two weeks.
Meanwhile, according to a report by THISDAY newspaper of Nigeria, pressure is mounting on Mike Ikpoki, the CEO of MTN Nigeria to resign.
The boss of Africa’s biggest mobile company, MTN, has resigned after receiving a $5.2bn (£3.4bn) fine from Nigeria.
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MTN’s stock has fallen nearly 18% in the few weeks since it confirmed that the Nigerian Communications Commission was imposing the massive fine in relation to a dispute over the timing of the disconnection of 5,1 million unregistered SIM cards.
