MTN has been appalling: analyst
The Nigerian Communications Commission recently imposed a fine of around R73 billion on MTN Nigeria, sending the company’s share price plunging.
The fine was imposed because MTN Nigeria did not disconnect 5.1 million unregistered subscribers as required by the country’s SIM registration rules.
The news broke early on 26 October, but shareholders had to wait until much later that day for an official announcement from MTN.
The company initially evaded questions regarding the issue, and the lack of transparency from MTN was widely criticized.
Business Day TV host and investor Simon Brown said MTN set all sorts of lows for corporate disclosure.
He joked that you have to admire a company which “can say nothing, and then deplore the resultant frenzy of speculation”.
Speaking on Business Day TV, Sasfin Securities’ David Shapiro said its loss is not only around R70 billion in market cap, but also the trust of investors.
“They [MTN] have been appalling. They [management] brought a lot of ruin to the company,” he said.
Shapiro questioned where former MTN CEO Sifiso Dabengwa was during the debacle, and why we have not heard from the MTN Nigeria CEO.
He previously said investors want clarity on why the fine was imposed, and what is happening behind the scenes. “They have to let us know how the negotiations are progressing.”
MTN CEO resigns
On 9 November MTN announced that Sifiso Dabengwa had resigned as CEO, following the incident in Nigeria.
“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,” said Dabengwa.
MTN appointed former MTN CEO Phuthuma Nhleko as executive chairman in a temporary capacity.
Nhleko has agreed to act as executive chairman for a maximum period of 6 months while the company identifies a successor for Dabengwa.
More on MTN
Behind MTN’s R73-billion Nigeria mess
How MTN could have avoided the R71-billion fine
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