MTN is still not out of the woods after its CEO steps down over a multibillion dollar fine
Over the past couple of weeks, MTN has found it hard to stay out of the headlines.
The company's share price plunged following news that the company was facing a fine of $5.2 billion by the Nigerian telecoms regulator.
With time running out for the company to pay the fine along with the JSE launching a probe into MTN's conduct over the matter, yesterday the CEO stepped down.
But MTN is still facing a multibillion dollar fine due next week and heat from its shareholders.
Let's take a closer look at what's going on…
MTN’s CEO takes the fall
Yesterday, MTN announced the resignation of its CEO Sifiso Dabengwa, says Fin24. His resignation takes effect immediately.
The man at the helm of MTN has stepped down after the Nigerian telecoms regulator fined the company $5.2 billion “for not registering SIM card holders,” adds Fin24. This has had a massive impact on the company’s share price, as you can see in the chart below…
Taking over at the helm of MTN for “a maximum period of six months” is Phuthuma Nhleko, MTN’s the non-executive chairman, reports BDLive. This will give the company time to find a replacement for Mr Dabengwa.
Following the resignation of Mr Dabengwa, the Public Investment Corporation (PIC), which holds 13% of MTN, is questioning “the role that the board of directors played in the events” leading to the fine, says Bloomberg. The PIC believes “more people need to take collective responsibility for the fine”.
MTN could manage to reduce its impending fine
Talks between MTN and the Nigerian telecoms regulator are continuing in an attempt to reduce the fine, says IOL. A person familiar with the matter said that “MTN will probably get a lower fine”.
After initially falling in price yesterday, shares in MTN picked up by market close, ending the day 1.63% higher at R160.01.
MTN has until next Monday to pay its fine. Time will tell if the company can get the amount reduced.
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