N1.04trn NCC fine: Why MTN Group CEO, Dabengwa, resinged

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The recent N1.04 trillion fine imposed on MTN Nigeria by the Nigerian Communications Commission, NCC, may have claimed one person in the company as the President and Chief Executive Officer, MTN Group, Sifiso Dabengwa, resigned from his position, yesterday.

Dabengwa cited development in Nigeria as part of the reasons he was leaving, claiming that his resignation would be for the interest and growth of the company.

Meanwhile, the company has immediately appointed the non Executive Chairman of the company, Mr Phuthuma Nhleko as Executive Chairman in a temporary capacity.

Nhleko, would act as Executive Chairman for a maximum period of six months within which the company would appoint a successor for Dabengwa.

Part of Dabengwa’s resignation letter read: “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.”

Nhleko, however, is no stranger to the MTN business, having 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 subsequently chaired the group in a non-executive capacity for the past two and a half years (since May 29, 2013).

He said: “I will assume responsibility as Executive Chairman for the next six 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.

“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,” Nhleko said.

Meanwhile, the company also said Mr. Alan van Biljon would continue to serve as the Lead Independent Director on the MTN board of directors (MTN Board), while Nhleko takes over executive responsibility.

However, the group promised its stakeholders that it will continue to inform them of any material engagements with the Nigerian authorities via the Stock Exchange News Service of the JSE Limited.

It also advised its shareholders to continue to exercise caution when dealing in the company’s securities until a further announcement is made.

The Nigerian telecoms regulator, the Nigerian Communications Commission, NCC, penultimate week, slammed MTN Nigeria with N1.04 trillion fine for failing to disconnect subscribers with unregistered and incomplete subscriber identification modules (SIM) cards within the stipulated time.

Since then, the company has been negotiating with the commission to see how the fine could be reduced.

The latest in the negotiations was a letter the company sent to the NCC admitting guilt and appealing for leniency.

However, sources at the commission told Vanguard that the powers to reduce the fine or grant leniency in the whole matter were entirely in the hands of the Federal Government.

Source: Vanguard