MTN's Zimbabwe born CEO resigns after $5bln fine

By: 
Agencies

MTN says its CEO Sifiso Dabengwa has resigned, and it has appointed Phuthuma Nhleko as executive chairman in a temporary capacity.

Dabengwa has quit amid a fine hanging over MTN of $5.2 billion, which has been imposed on it by MTN Nigeria for failing to cut off 5 million unregistered subscribers.

"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 Dabengwa in a statement.

MTN is currently in talks with Nigerian authorities over the fine, which is due on November 16.

News of the fine, released almost two weeks ago, shook MTN’s shares, with sellers wiping R60 billion off its market capitalisation as the stock lost around a quarter of its worth.

MTN says Nhleko, currently non-executive chairman will act as executive chairman for 6 months while MTN identifies a successor for Dabengwa.

Nhleko 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 chaired the group in a non-executive capacity for the past two-and-a-half years.

"I will assume responsibility as executive chairman for the next 6 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,” says 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.

Questions have been raised about MTN’s governance as it failed to disclose the fine in a timely nature and is now the subject of a JSE probe into possible contraventions of the bourse’s listing rules.

Dabengwa , who was born in Zimbabwe, had been CEO of the group since 2011.

“Together with the MTN board, my second priority will be to find an appropriate CEO to take MTN forward. I will then revert to my non-executive chairman role," says Nhleko.

MTN, which launched in 1994, has 233 million subscribers in 22 countries in Africa, Asia and the Middle East.

Nigeria is its largest operation.

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