MTN has released an official statement confirming that the group has appointed Phuthuma Nhleko as Executive Chairman in a temporary capacity following the resignation of Sifiso Dabengwa as CEO due to the tough challenges being faced by the company in Nigeria.
The telecom company, which has been in the spotlight after being slammed with the huge N1.04 trillion fine by the Nigerian Communications Commission (NCC) is beginning to feel the impact, as the November, 16 deadline given to pay up the penalty draws nearer.
Following the disclosure of the penalty as a result of disobedience to NCC directives to disconnect all unregistered or not properly registered SIM cards, MTN shares lost almost a quarter of their value as trading stopped in South Africa for some time before a partial recovery.
“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,” said Sifiso Dabengwa in a statement.
The departing Group CEO of MTN previously headed the Nigerian operation of the telecom group, where it is the market leader by subscriber numbers.
MTN revealed that 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.
It was also stated in the released statement that the group is confident in the capability of Nhleko to act as the CEO and resolve pending issues, as he is no stranger to the business, having previously 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 has subsequently chaired the Group in a Non-executive capacity for the past two and a half years, since May, 29, 2013.
“I will assume responsibility as Executive Chairman for the next six months as I 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,” commented Nhleko.
To ensure compliance with King III, Alan van Biljon will continue to serve as the Lead Independent Director on the MTN board of directors (“MTN Board”) whilst Nhleko takes over executive responsibility.
“Together with the MTN Board, my second priority will be to find an appropriate Chief Executive Officer to take MTN forward. I will then revert to my Non-executive Chairman role,” concluded Nhleko.
Stakeholders are reminded that MTN will continue to inform them of any material engagements with the Nigerian authorities via the Stock Exchange News Service of the JSE Limited (SENS).
Shareholders are advised to continue to exercise caution when dealing in the Company’s securities until a further announcement is made.
Jumoke Akiyode
