$5.2bn fine: MTN picks Nhleko to negotiate with Nigeria

When the fine was first announced at the end of October, MTN’s share price tumbled.

The fine, which amounts to double MTN’s profit a year ago, was for failing to cut off unregistered mobile users.

A few observers, however, say the government is acting more out of financial interest.

“As you are aware I am familiar with MTN having served as Non-executive Director and Chairman of MTN from July 2001 until June 2002 and thereafter as an executive director, Group President and CEO until March 2011”, he said.

“The board chose Nhleko because of his vast experience in Nigeria and his in depth knowledge of the company”, MTN’s spokesman Chris Maroleng said.

Shares were halted in Johannesburg last week until the company promised it was negotiating the fine; they’re up 1.6% today.

Following weekend’s resignation of the Chief Executive Officer of MTN Group, Mr. Sifiso Dabengwa, there is pressure on the head of its Nigerian unit, Mr. Mike Ikpoki, to also take a bow, THISDAY has learnt.

A statement from the company said Nhleko, the current non-executive chairman, has agreed to act as executive chairman for a maximum period of six months while the company identifies a successor for Dabengwa.

“I will 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 in a statement on Monday.

MTN’s largest shareholder, South Africa’s Public Investment Corporation (PIC), said on Monday it wanted to meet with Nhleko about his plans to tackle the fine and wants more staff at MTN to take responsibility for the penalty.

Nhleko’s hopes to get MTN out of NCC’s ‘claws’.

The resignation of MTN’s group chief executive officer Sifiso Dabengwa should not be seen as an admission of wrongdoing, the operator’s spokesperson said.

Ratings agencies Moody’s and Fitch lowered MTN’s credit rating outlook to “negative” last month flagging the risk of significant cash outflow and the likely damage to the Nigerian business due to lengthy talks.