Business27.05.2016

Why I left MTN

By Staff Writer

Sasfin Securities deputy chairman David Shapiro said MTN’s refusal to answer questions about trouble at the company resulted in him divesting from the network.

MTN has faced many challenges recently, including a $3.2-billion fine in Nigeria for not disconnecting unregistered SIMs.

MTN was criticised for poor communication regarding the fine and related issues, and this is one of the reasons why Shapiro sold his shares in the company.

Speaking on BusinessDay TV, Shapiro said that “as soon as you smell trouble at a company”, you should “just go”.

“Sloppiness in one area points to sloppiness in another area,” said Shapiro.

He said analysts asked MTN questions after they saw trouble, but they could not get answers from the company.

“From an investment point of view, I am gone.”

Shapiro said MTN may defend itself, but questions remain on why the company could not provide answers to the questions from analysts.

Short MTN: investor

American investment manager James (Jim) Chanos recently said South Africa is a wreck and Nigeria is basically a failed state, which puts MTN at risk because of its exposure in the two countries.

Speaking at the Sohn Conference, Chanos said his short pick was MTN, because it generates most of its money from Nigeria and South Africa.

As these two countries are struggling economically, MTN will struggle and makes for a good share to short, he said.

MTN spokesperson Chris Maroleng hit back, saying the prospects of MTN remain positive and unchanged.

MTN responds

Maroleng said Shapiro’s complaints are likely referring to the MTN Nigeria fine, as well as the appointment of a new Group CEO.

Maroleng said MTN is not always in a position to provide details on the MTN Nigeria fine, as discussions with authorities are ongoing and remain confidential.

“Regarding the new Group CEO, MTN has indicated that we anticipate the appointment of a new CEO to be concluded over the next few months,” he said.

He said stakeholders, including investors, may understandably be frustrated by a lack of regular updates around these issues.

“However, given the importance of these matters, as well as [their confidential nature], MTN will continue to keep the market and all our stakeholders informed about any material updates through SENS.”

He said MTN has stepped up engagement with stakeholders over the past six months, given the significance of the Nigerian fine on its business.