Chief Executive Officer (CEO) of the largest telecommunication network operator in Africa, MTN, Phuthuma Nhleko has since arrived in Nigeria to engage the authorities in negotiations to save the company from over N1 Trillion penalty which the country’s telecommunication regulator slammed on it.
The fine, due to be paid tomorrow, Monday, was imposed by the Nigerian Communications Commission after the mobile giant failed to deactivate 5.2 million improperly registered SIM cards.
The company’s spokesperson, Chris Maroleng, confirmed Nhleko’s Nigeria visit 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”.
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 percent on Monday after sagging by nearly 20 percent 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. [myad]
