MTN Group’s CEO in Nigeria to Make Last Minute Deal

MTN Group’s CEO, Phuthuma Nhleko is in Nigeria to try to negotiate with authorities to reduce the over $5 billion fine slapped on Africa’s largest mobile operator.

The fine which is due to be paid tomorrow, was imposed by the Nigerian Communications Commission after the mobile giant failed to deactivate 5.2 million improperly registered SIM cards.

It is not clear how long Nhleko will be in Nigeria, but it is unlikely he will return to the country without striking a deal with Nigerian authorities.

Chris Maroleng, MTN’s spokesman confirmed Nhleko’s visit to Nigeria but could not shed any light on when he was expected to return to South Africa.

“With regard to Mr Nhleko, he is in Nigeria and has travelled there as part of the continued engagements with our operations in that country. Our position is that we continue to be engaged with the authority in Nigeria.”

Nhleko took over the reins at MTN following the sudden resignation of Sifiso Dabengwa as chief executive on Monday, citing “the most unfortunate prevailing circumstances occurring at MTN Nigeria” as the reason for his departure.

Nhleko’s visit to Nigeria comes amid reports that a section of telecoms subscribers – part of the National Association of Telecommunications Subscribers (Natcoms) in Nigeria – filed a lawsuit against the commission over the fine it imposed on MTN Nigeria.

According to reports, Natcoms wants the Federal High Court in Nigeria to stop the commission from imposing the fine on MTN and to “compel the [commission] to account for all the monies it has collected as fines from telecoms operators since 2002, and to pay such monies to subscribers as compensation for poor service quality”.

Maroleng said MTN had “taken note of that [Natcoms] report and our colleagues in Nigeria are monitoring the developments”.

The return of Nhleko, who stepped down as MTN group CEO in March 2011 to make way for Dabengwa, saw an immediate impact on the company’s share price, which rose 1.4% on Monday after sagging by nearly 20% in the week prior to his appointment.

The Public Investment Corporation (PIC), one of the biggest shareholders in MTN, this week said it expected other executives to face the axe for the Nigeria debacle.

It issued the following statement: “While the PIC acknowledges that Mr Dabengwa’s resignation is the noble thing to do in the current circumstances, the PIC is of the view that a lot more people need to take collective responsibility for the fine that was imposed on MTN Nigeria for alleged failure to comply with regulatory requirements in that country.”

The corporation, which handles pensions for government employees, questioned how MTN’s board of directors had exercised its fiduciary duties and also why the company’s risk and compliance function did not foresee that noncompliance could lead to a penalty.

Source: FIN24