N 1 .04trn Fine: MTN Shares Rebound As New CEO Takes Charge

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MTN shares rebounded at the close of trading
yesterday afternoon at the Johannesburg Stock
Exchange (JSE), South Africa after falling behind in
the morning following the shock departure of Mr Sifiso
Dabengwa, as the chief executive officer of MTN
Group and the appointment of Mr Phuthuma Nhleko,
as interim executive chairman.

Dabengwa’s resignation yesterday morning followed his
inability to resolve the N1.04 trillion ($5.2 billion) fine
imposed by the Nigerian Communications Commission
(NCC) for MTN not deactivating 5.1 million
unregistered subscriber identity module (SIM) cards
from its network. Dabengwa was once the CEO of
MTN Nigeria from 2004 to 2006.

Shares in MTN had slid by about 20 per cent since
October 26 when the fine was first reported, but were
up 1.4 per cent at 159.65 rand by 1349 GMT on
Monday, following news of Nhleko’s appointment. The
shares rebounded after falling more than three per cent
in the early morning trading.

With the ascension of Nhleko as interim executive
chairman, talks will now shift to Abuja, Nigeria’s
capital as Nhleko’s primary focus is to hold talks with
the Nigerian authorities to resolve the fine. Nhleko,
formerly a non-executive chairman would be in charge
for a maximum period of six months while the company
identifies a successor for Dabengwa.

“I will assume responsibility as executive chairman for
the next 6 months as I proactively deal with the
Nigerian regulator and will continue to work with
them in addressing the issues around unregistered
subscribers as a matter of urgency,” said Nhleko.

Dabengwa left after taking responsibility for the
penalty. “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,” stated
Sifiso Dabengwa.

The week before MTN disclosed the fine, Dabengwa
said the company had taken a hit in Nigeria during the
quarter ended September 30 because of new
government’s SIM card registration requirements.
Analysts and investors noted his lack of foreknowledge
of the fine just a few days before its disclosure as
troubling.

Source:INFORMATION NG

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