Reports coming out of South Africa says MTN Group CEO Mr. Sifiso Dabengwa has resigned, and it has appointed Phuthuma Nhleko as executive chairman in a temporary capacity. This comes after MTN was fined $5.2b/1.4 tr Naira/520b KES over failure to deactivate SIM cards that didn’t met the Nigerian Communications Commission (NCC) guidelines. This has seen MTN shares fall gradually over the past two weeks. There are reports that Mr. Sifiso Dabengwa was even in Nigeria last week to negotiate with regulators only for us to hear that he was stepping down but in a statement released today, the outgoing CEO said “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,”
Outgoing MTN Group CEO Mr. Sifiso Dabengwa
Could there be another reason?
AFK Insider reported that the South African authorities were finalising plans to place a heavy fine on MTN for insider trading. “The market regulation team is looking into trades that took place before the announcement in order to determine if there is any evidence of possible insider trading,” Peter Redman, Johannesburg Stock Exchange (JSE) market regulation advisor, said in a statement
MTN has been a subject of controversy even as many in the industry think the fine may be too heavy for them to pay. Etisalat which is number 4 by subscriber in Nigeria had filed a suit against the NCC on allegations that it was favouring MTN with respect to voice tariff. “Etisalat says it is instituting this action because, contrary to this earlier directive by NCC, the regulator has granted MTN further concession to operate yet another 30 percent differential between its on-net and off-net calls, a move that can only further grant the South African telecoms company an overbearing influence over the Nigerian market.
MTN is the largest operator in Nigeria by subscribers and has its biggest operation here but is headquartered in South Africa.
Mr. Sifiso Dabengwa took over as the CEO in 2011 and is stepping down less than five years on the job.