MTN brings forward CEO start date three months ahead of plan
MTN Group’s next chief executive will take over three months ahead of plan, the South African telecoms company announced on Monday, as the firm faces allegations it illegally moved $14 billion out of Nigeria.
Rob Shuter, Vodafone European boss, was due to start in July next year but MTN — widely seen as a post-apartheid corporate success story said in a statement accompanying its quarterly update he would now start on 13 March 2017.
Shuter, a South African-born banker with background in risk management, will inherit a company that is the subject of a parliamentary investigation in Nigeria on whether it unlawfully repatriated $13.97 billion between 2006 and 2016.
“MTN Nigeria continues to refute the allegations that MTN Nigeria had improperly repatriated funds from Nigeria,” the company said in its quarterly update. “Consequently MTN Nigeria will strongly defend any action that would be prejudicial to its interest.”
The crux of the allegation is that MTN did not obtain certificates declaring it had invested foreign currency in Nigeria within a 24-hour deadline stipulated in a 1995 law and therefore the repatriation of returns on those investments was illegal.
It is the latest setback for MTN in its most lucrative but increasingly problematic market, coming months after it agreed to pay a reduced fine of 330 billion naira ($1.08 billion) to end a long-running dispute over unregistered SIM cards.
MTN has attracted controversy over its ventures in some frontier markets, with questions asked about its decision to enter war-ravaged countries such as Afghanistan and Iran.
“For the past few years, there’s has been this constant cloud of uncertainty around MTN. There’s no smoke without fire and, unfortunately, there’s a hell of a lot of smoke at the moment,” said one fund manager, whose firm own shares in MTN.
Three years ago, Turkey’s Turkcell unsuccessfully sued MTN, alleging that it used corruption and bribery to win a mobile licence in Iran, where it has started repatriating over $1 billion in accumulated dividends following the easing of U.S.-led sanctions.
MTN shares have fallen by more than 14 percent to their lowest level in more than six years since the latest issue surfaced on Sept. 27.
As of 0811 GMT, the stock was up 4.72 percent at 112.05 rand, outpacing a slightly higher JSE Top-40 index.
MTN also said it had suspended dividends payouts from Nigeria, where it runs the country’s biggest wireless phone network which generates a third of its annual sales.
The company also reported a slight fall in third-quarter user numbers due to a weaker showing in South Africa, where it vies for market share with Vodacom and Cell C .