Acting MTN boss working to get Nigerian fine reduced

JOHANNESBURG MTN Group has asked its former head to take temporary charge of Africas biggest mobile telecoms company after its chief executive resigned over a $5.2 billion fine imposed by Nigeria.

Non-executive chairman Phuthuma Nhleko was named executive chairman of MTN for a period of up to six months after Sifiso Dabengwa stepped down as CEO with immediate effect on Monday.

The priority for Nhleko will be trying to get a reduction in the fine demanded by the Nigerian Communications Commission (NCC).

Nigeria, Africas most populous nation, is MTNs largest market and contributes more than a third of its revenues.

MTN said it was continuing talks with the authorities in Nigeria over the fine.

The NCC penalised MTN last month for failing to cut off users in Nigeria with unregistered SIM cards.

The Nigerian regulator has been pushing cell phone network companies to verify the identity of their subscribers because of fears that unregistered SIMs were being used for criminal activity in a country facing Islamic militant group Boko Harams insurgency.

MTNs 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.

A lot more people need to take collective responsibility for the fine... for the alleged failure to comply with regulatory requirements, the PICs chief executive Daniel Matjila said in a statement.

Shares in MTN have slid by nearly 20 percent since 26 October when the charge was first reported, but were up 1.4 percent at 159.65 rand by 1349 GMT on Monday, following news of Nhleko's appointment.

The board chose Nhleko because of his vast experience in Nigeria and his in depth knowledge of the company, MTNs spokesman Chris Maroleng said.Dabengwa had been chief executive of MTN since 2011 when he took over from Nhleko.

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 said in a statement.

In his nine years as chief executive, Nhleko was largely credited with the companys expansion outside its home market. The firm spans more than 20 countries, including Iran.

Obviously having only six months hes there to do something about the fine, Momentum SP Reid analyst Sibonginkosi Nyanga said. Hes the guy who built MTN into what it is.

MTN also faces a Johannesburg bourse investigation on the timing of its announcement of the penalty.

Ratings agencies Moodys and Fitch lowered MTNs 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.

South Africas government has said it was concerned about the fine but said this would not affect relations between the continents two biggest economies.

PIC WANTS MORE TO TAKE RESPONSIBLY FOR NIGERIA FINE

The largest shareholder in South Africa' MTN Group, the Public Investment Corporation (PIC), said on Monday it wants even more people to take responsibility for the $5.2 billion fine imposed on the company by Nigerian authorities.

Sifiso Dabengwa announced his resignation as MTN CEO on Monday, citing the fine imposed for failing to cut off users with unregistered SIM cards.

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 Chief Executive of the PIC, Daniel Matjila said in a statement.