The embattled MTN announced on Monday that its CEO, Sifiso Dabengwa, has resigned.
MTN [JSE: MTN], which has been in the spotlight after Nigeria slapped it with a massive $5.2bn (R71bn) fine for not registering SIM card holders, announced that Dabengwa has resigned with immediate effect and that Phuthuma Nhleko has been appointed as executive chairperson in a temporary capacity.
"Due to the most unfortunate circumstances occurring at MTN Nigeria, I have tendered my resignation immediately in the interest of the Company and its shareholders," Dabengwa said.
His resignation came as the penalty deadline approached. MTN was given until November 16 to pay the penalty, which relates to the timing of the disconnection of 5.1 million subscribers and is based on a charge of 200,000 naira ($1 005) for each unregistered customer.
MTN said Nhleko, the current non-executive chairperson, has agreed to act as executive chairperson for a maximum period of 6 months while the Company identifies a sucCompanyfor Dabengwa.
Nhleko has been with MTN since 2001, when he served as non-executive director and chairperson. From June 2002, he was 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 (29 May 2013).
Nhleko said that in his new role, he will proactively deal with the Nigerian regulator and continue working with them to address the issues around unregistered subscribers as soon as possible.
“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," he said.
Ratings agency Standard & Poor’s (S&P) has downgraded MTN from ‘BBB’ and ‘zaAA+’ to ‘BBB-’ and ‘zaAA-’ due to its operations in Nigeria and other “high-risk” environments.
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).
MTN said that shareholders are advised to continue to exercise caution when dealing in the CompaCompany’srities until the Company’s announcement is made.
To ensure compliance with King III, Alan van Biljon will continue to serve as the Lead Independent Director on the MTN board of directors while Nhleko takes over executive responsibility.
