Nigeria, Africa’s most populous country, is MTN group’s largest market where it had over 62.8 million subscribers by the second quarter of 2015.
The chief executive of South Africa-based mobile phone operator MTN has resigned over a $5.2 billion fine imposed on the company in Nigeria, the telecoms giant said in a statement Monday.
“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,” CEO Sifiso Dabengwa said.
MTN has appointed non-executive chairman Phuthuma Nhleko as executive chairman for a maximum of six months while the company identifies a successor for Dabengwa, the statement said.
The Nigerian Communications Commission (NCC) fined Africa’s largest telecoms firm for missing a deadline to deactivate 5.1 million unregistered SIM cards.
The fine is the largest ever imposed on a company in Africa. MTN has until Nov. 16 to pay the penalty, but the company is in negotiations to pay considerably less.
It also exceeds sales of almost $3.9 billion that the operator made in Nigeria in 2014; it’s more than the revenue the Nigerian government made from oil in the second-quarter of the year; and is about a third of all the tax revenues Nigeria has collected between January and June 2015.
The company’s shares lost almost a quarter of their value following the disclosure of the fine, before a partial recovery.
The Johannesburg Stock Exchange (JSE) has launched an investigation into MTN for “possible insider trading” before the company announced it had been hit by the fine.
Its share price fell from 190.84 rand ($13.4), shortly before the fine was revealed, to close at 157.45 rand on Friday—a fall of 17.5 percent in two weeks.
Shares were steady at 157.45 rand on Monday morning, the lowest price since April 2013.
The probe by the JSE could result in South Africa’s bourse operator slapping MTN with another hefty fine or result in criminal charges.
Nigeria, Africa’s most populous country, is MTN group’s largest market where it had over 62.8 million subscribers by the second quarter of this year.
Nhleko said he would “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.
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