Shanduka Group, SA Firm Buys into MTN Nigeria

Shanduka Group, the South African black-run investment holdings group has bought into MTN Nigeria in deal reportedly worth $335 million but questions about corporate governance and a potential conflict of interest are being asked in South Africa.

The concerns stem from Mr. Cyril Ramaphosa who controls Shanduka Group being chairman of the MTN Group, of which MTN Nigeria is a subsidiary.

MTN Group has refused to comment on the deal.

The deal was Shanduka’s largest-ever investment outside of South Africa according to  Phuti Mahanyele, the chief executive officer of the company.

Mahanyele insisted that the deal was above board and that Ramaphosa was not directly involved in negotiating the deal.

"It was not an exclusive deal, but was put out into the open market,"  Mahanyele said.

"The shareholding in MTN Nigeria is held by MTN International and (Ramaphosa) sits on the board of the (holding) group and was not involved (in the negotiations)"

Shanduka said the stake had been bought through Mauritius-based Shanduka Telecommunications. Standard Chartered Bank arranged funding and acted as joint financial adviser and mandated lead arranger.

MTN Group indirectly owns MTN Nigeria with a stake of more than 78%. The Nigerian company is the group’s largest contributor to revenues with more than 45.6-million customers at the end of September.

Mahanyele said the investment in MTN Nigeria was integral to Shanduka’s strategy to expand into Africa. This entails investing in growth sectors including infrastructure, resources, food and beverages, and property.

Nigeria is a key growth area Shanduka is targeting because of its large population and a growing consumer market.