MTN shares rebounded at the close of trading on Monday at the Johannesburg Stock Exchange (JSE), South Africa after falling behind in the morning following the shock resignation of Mr Sifiso Dabengwa as chief executive officer of MTN Group and the appointment of Mr Phuthuma Nhleko, as interim executive Chairman.
Dabengwa’s resignation followed his inability to resolve the N1.04 trillion ($5.2 billion) fine imposed by Nigerian Communications Commission (NCC) for MTN not deactivating 5.1 million unregistered or badly registered 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 percent since October 26 when the fine was first reported, but were up 1.4 percent at R159.65 by 1349 GMT on Monday, following news of Nhleko’s appointment. The shares rebounded after falling more than three percent in 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 looks for 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 the 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.
-Leadership