MTN Nigeria Fine Cut 35% to $3.4 Billion as Local CEO Quitsby
Fine payable by the end of December, Nigerian regulator says
MTN's chairman will consider penalty, to consult further
The Nigerian telecommunications regulator cut the fine imposed on MTN Group Ltd. to $3.4 billion from a record $5.2 billion and the chief executive officer in the country quit as part of a wider management shake-up at Africa’s biggest mobile-phone operator.
The shares gained 1.2 percent to 148.49 rand as of 9:32 a.m. in Johannesburg, valuing the company at 274 billion rand ($19.1 billion). The stock is still down about 22 percent since the penalty was made public on Oct. 26.
The Nigerian Communications Commission decided to reduce the levy after considering a request from the company, Johannesburg-based MTN said in a statement on Thursday. MTN named Ferdi Moolman, the former CEO of the company’s Iran unit and most recently the chief financial officer of MTN Nigeria, as head of the Lagos-based operations, replacing Michael Ikpoki, who resigned.
The Nigerian regulator imposed the fine on MTN for failing to meet a deadline to disconnect 5.1 million unregistered subscribers. Group Chairman Phuthuma Nhleko took an executive position in November and led negotiations with the NCC after CEO Sifiso Dabengwa quit.
Nhleko will “immediately and urgently re-engage with the Nigerian authorities before responding formally,” MTN said in the statement. “All factors having a bearing on the situation will be thoroughly and carefully considered before the company arrives at a final decision.”
The initial fine of $5.2 billion was more than MTN’s total sales in Nigeria in 2014 and the equivalent of about 37 percent of the group’s total revenue. A full payment would have exceeded the revenue the Nigerian government made from oil in the second-quarter, and more than double the state’s non-crude proceeds, according to central bank data. MTN’s largest shareholder, the Public Investment Corp., in November called on the board to take greater responsibility for the fine.
The company decided to reinstate its previous reporting structures to boost oversight, leadership and compliance across 22 countries in Africa and the Middle East, the company said in a separate statement. Jyoti Desai will be group chief operating officer, based in Johannesburg, while Karl Toriola will be vice president for the West and central African region and Ismail Jaroudi will play the same role for the Middle East and north Africa. Amina Oyagbola replaces Akinwale Goodluck as head of regulatory and corporate affairs in Nigeria.