MTN Group CEO Arrives Nigeria To Negotiate With FG On N 1 trn Fine

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MTN Group CEO Sifiso Dabengwa has arrived
in Nigeria to negotiate with the Federal Government
over the N1.04trn fine imposed on the telecom firm by
the Nigerian Communications Commission (NCC) ) for
violating its directive on SIM deactivation.

Dabengwa, who led a powerful team from South
Africa, is currently in Abuja where he will be
engaging Nigerian authorities concerning the
company’s fine.

Dabengwa, who served as CEO of MTN Nigeria
between 2004 and 2006, is expected to meet with the
NCC Executive Vice Chairman, Umaru Garba
Danbatta, National Security Adviser, Major-
General Babagana Monguno (rtd.), and Chief of Staff
to the President, Alhaji Abba Kyari, to negotiate a
soft landing for the company.

“Any material developments in these engagements will
be communicated to shareholders,” a statement from the
company issued monday stated.

MTN has until November 16 to pay the fine, which
relates to the timing of the disconnection of 5.1 million
subscribers and is based on a charge of N200,000 for
each unregistered customer not disconnected from its
network.

Trading in MTN shares resumed yesterday on the
Johannesburg Stock Exchange (JSE) after the
telecoms firm issued a cautionary statement on its
shares. JSE had temporarily suspended trading in
MTN Group shares after the company’s stock tumbled
last week following a $5.2bn fine by the Nigerian
Communications Commission (NCC) for violating its
directive on SIM deactivation.

JSE Director, Issuer Regulation, John Burke, had
stated that “The JSE has halted all trading on MTN
Group Limited. Trading will resume as soon as MTN
Group Limited issued a SENS announcement.”

In a statement later, MTN Group Executive for
Corporate Affairs, Chris Maroleng, said: “We take
note of the JSE’s decision to suspend MTN’s shares.”
Trading in the shares later resumed after MTN issued
the cautionary statement.

After declining by about 20 per cent last week, the
company’s shares dipped further by about eight per cent
monday.

Credit rating agencies Fitch and Moody’s have
lowered MTN’s credit rating outlook to “negative”
from “stable”, citing the regulatory fine. Standard &
Poor’s also lowered the group to “BBB-” from
“BBB” and placed it on credit watch with negative
implications.

Nigeria is MTN’s biggest market with 62 million
customers as of September. The stock has declined
more than a fifth since news of the penalty was
reported a week ago, and is trading at about three-
year lows.

MTN could also face an investigation from the JSE
to determine whether it, among other things, failed to
inform the market timeously about its fine in Nigeria.
The fine was announced early last Monday but MTN
informed shareholders only later that day, saying the
fine was related to the “timing” of the disconnection of
subscribers.

Under South African capital markets rules, companies
are required to immediately warn shareholders of any
materially price-sensitive information.

MTN is Africa’s largest mobile operator, with 233
million subscribers across the continent, with large
market share in South Africa and Nigeria. It also has
a large presence in the Middle East.

However, its stock began to tumble last week following
a $5.2 billion (N1.04trn) fine by Nigerian regulators
for not disconnecting up to five million unregistered
SIM cards.

Giving reasons for the fine, NCC had said the
commission had consistently engaged Mobile Network
Operators, (MNOs) to strictly adhere to the
regulations and its business rules in the registration of
their subscribers. But despite all of these several
engagements, the commission said it confirmed various
cases of violations of the regulations and sanctioned
appropriately.

“Given the recent security concerns in the country,
government held several meetings with MNOs on the
need to ensure only properly registered SIM cards are
active on their networks,” NCC had said while
announcing the fine slammed on the firm.

Source: INFORMATION NG

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