$5.1bn fine: New MTN boss vows to “deal with NCC”
MTN Group CEO, Sifiso Dabengwa, has quit the position after a multi-billion dollar fine was levelled against the Africa telecoms giant by Nigeria’s industry regulator.
Phuthuma Nhleko, the man who temporarily replaces Dabengwa said he will “proactively deal with” the regulatory body.
In October, the Nigerian Communication Commission (NCC) slammed the $5.2 billion (N1.04 trillion) fine on MTN Nigeria for allowing 5.1 million subscribers in Nigeria continue using unregistered SIM cards after a deactivation deadline expired.
Reports suggest MTN did not disclose the NCC hammer to shareholders on time over fears its shares could take a heavy hit – fears that actually materialised after news of the fine hit the airwaves.
NCC expects MTN to pay the fine on or before November 16. Both parties are reportedly in talks to “find a way out.”
Dabengwa’s resignation follows the big blow, and Nhleko has been appointed his interim successor. The new MTN boss said he will lead the company for the next six months, at least.
“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,” Dabengwa, who had been MTN chief executive since 2011, said in a statement.
“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,” Nhleko said.
MTN has some 233 million subscribers in 22 countries in Africa, Asia and the Middle East. Its nearly 63 million subscribers in Nigeria make it is the largest telecoms operator in the country.
The NCC fine sent shudders down the spine of stock traders as MTN shares slumped more than 20 per cent on the Johannesburg Stock exchange.
The dip was so deep it wiped out nearly $4.2 billion off MTN’s market value, reports say. South Africa authorities had to suspend MTN stocks, and probe a “possible insider trading.”
Authorities feared MTN top shots who probably had prior knowledge of the fine may have “illegally” traded in company stocks for private gain before the news became public, reports say.
Reports also suggest MTN failed to disclose the fine to its shareholders on time.
Things are not looking good for the telecoms giant as Moody’s and Fitch lowered MTN’s credit rating outlook to “negative” in October worsening fears surrounding its bankability.
The NCC fine is perhaps the harshest punishment handed any corporate body in Nigeria.
Digital documentation has become a big deal in Nigeria where the government seek to identify everyone bearing phone lines in the country.
Experts say SIM documentation is also an important part of Nigeria’s war on Boko Haram’s terrorism and the overall security of its people.
They say President Muhammadu Buhari’s no-nonsense “body language” may have contributed to the severity of the fine the NCC slammed on MTN.
Nigeria’s government bodies seemed to have been re-energised to perform their duties since Buhari was sworn in on May 29.
