The CEO of Africa’s biggest telecommunications company resigned on Monday because of a $5.2 billion fine meted out to from MTN Group’s Nigerian subsidiary.
Sifiso Dabengwa was quoted in a company statement as saying he resigned “due to the most unfortunate prevailing circumstances occurring at MTN Nigeria.”
Former group president Phuthuma Nhleko will act in
his place for the next six months, the company said. Nhleko promised to “proactively deal” with the Nigerian Communication Commission, the regulator that fined the subsidiary for failing to meet a deadline to deactivate 5.2 million unregistered cellphone SIM cards. It’s considered a security threat in Nigeria, where authorities say cell phones are used to coordinate suicide bombings and other militant attacks by Boko Haram Islamic extremists as well as in rampant kidnappings and armed robberies.
The share price of the company based in South Africa and listed on the Johannesburg Stock exchange has lost about a fifth of its value, according to South Africa’s Business Report.
“Shareholders are advised to continue to exercise caution when dealing in the company’s securities until a further announcement is made,” MTN said.
On Monday, the price dipped on news of Dabengwa’s resignation. When the fine was first announced at the end of October, MTN’s share price tumbled. Last week, the Johannesburg Stock Exchange halted trade of MTN shares until the company assured shareholders that it was negotiating the fine with Nigerian authorities.
Nigeria’s 60 million-plus MTN cellphone subscribers provide about one-third of profits for MTN Group, which has 233 million subscribers in Africa, Asia and the Middle East, according to the company website.