MTN Chairman To Exit As N780bn Fine Resolution Nears

MTN, Africa’s top mobile operator is hopeful that in a matter of weeks it would resolve the N780 billion fine on MTN Nigeria as discussion with Nigerian authorities is nearing to a close just as its Executive Chairman, Phutuma Nhleko, prepares to exit.

Nhleko who assumed the role of Executive Chairman, MTN Group on November 9, 2015 following the immediate resignation of Mr. Sifiso Dabengwa as MTN Group President and chief executive officer (CEO). He agreed to act as executive chairman for a maximum period of six months while the company identifies a successor for Dabengwa.

His six months ends on May 9, 2016. Nhleko took the job in order to “proactively deal” with the
Nigerian authorities after Dabengwa resigned, Nhleko said at the time. Nhleko won’t return to a non-executive role before he comes to an agreement with the Nigerian Attorney General, said the person, who asked not to be identified because the plans are private.

The plan for an on-time departure provides a ray of clarity, however thin, into a murky, months-long crisis that’s gutted the share value of Johannesburg-based MTN by one-third. There’s a shortlist of three candidates to become the new CEO, according to the person familiar with the matter. Two are from within MTN and one is an external option, the person said.

MTN was hit by the penalty in October for missing a government-imposed deadline to disconnect 5.1 million subscribers who had been declared unregistered in the country following a crackdown on security.

The fine was later reduced by 25 percent from an original $5.2 billion. While the lower amount equates to almost three times MTN’s 2015 net income, a spokesman for the West African country’s House of Representatives said last month the original levy should be doubled to $10 billion.

MTN shares have declined 33 percent since the penalty was made public on Oct. 26, valuing the company at 236 billion rand ($16 billion). The shares fell 0.8 percent to 127.72 rand as of 4:09 p.m. in Johannesburg on Tuesday.