MTN May Sack Nigeria Management over $5.2Bn Fine

Indications have emerged that the MTN Group may this week call for the resignation of some management staff of its Nigerian subsidiary over the $5.2 billion fine imposed on it by Nigerian Communications Commission (NCC) industry regulator, according to Punch Newspapers.

Punch citing sources involved in the matter, reported that MTN group, having reached advanced negotiations with the Nigerian Communications Commission about reducing the fine, had taken a decision to sack the management team of the company.

The sources stated that Mr. Michael Ikpoki, MTN Nigeria chief executive officer, and other principal management officers would vacate their seats “for others to clean up the mess.”

Mr. Wale Goodluck, corporate executive, MTN Nigeria, declined comments on the matter, saying, “Kindly reach out to Funso Aina (Head of Public Relations) on that.”

“We cannot officially speak or issue a statement on this matter except on the directive of the MTN Group (South Africa). However, it has become pertinent to state here that we are on the brink of resolving the matter with the NCC as regards the fine,” Aina simply said.

Mr. Sifiso Dabengwa had earlier in the day resigned as MTN Group President and Chief Executive Officer after taking responsibility for the penalty.

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.”

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.

According to them, MTN will probably get a lower fine, which was imposed after the company failed to meet a deadline to disconnect 5.1 million unregistered subscribers, but they did not state by how much the regulator was willing to cut the penalty.

MTN shares reversed earlier losses to gain 1.6 per cent to R160.01 as of 11:49 am on Monday in Johannesburg, giving the company a market value of R296bn ($21bn).

The MTN Group said in a statement, “Stakeholders are reminded that MTN will continue to inform them of any material engagements with the Nigerian authorities via the stock exchange news service of the JSE (Johannesburg Stock Exchange) Limited.

“Shareholders are advised to continue to exercise caution when dealing in the company’s securities until a further announcement is made.”

The group has appointed Phuthuma Nhleko as the executive chairman in a temporary capacity.

Nhleko, the non-executive chairman before now, agreed to act as executive chairman for a maximum period of six months, while the company identifies a successor for Dabengwa.

He said on Monday that he would lead further conversations with the NCC.

Nhleko said, “I will assume responsibility as executive chairman for the next six 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.

“Together with the MTN Board, my second priority will be to find an appropriate chief executive officer to take MTN forward. I will then revert to my non-executive chairman role.”

When approached, Tony Ojobo,  spokesperson for the NCC, declined to comment.