MTN Chief Quits Over Nigeria Fine

MTN Group President and Chief Executive Officer, Sifiso Dabengwa, has resigned. (Image source: villageyouth.co.za)

The embattled chief executive of South Africa-based mobile phone giant MTN has resigned over a US$5.2bn (£3.4bn) fine imposed on the firm by Nigeria. "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 in a statement.

BBC News reports that MTN has a 16 November deadline to pay the fine, imposed over its failure to register all Sim cards.

This allegedly opened the way for militant Islamist group Boko Haram to use the network.

MTN said its its non-executive chairman Phuthuma Nhleko would act as executive chairman until a successor to Mr Dabengwa is found.

Mr Nhleko said he would continue to seek a solution to the dispute with Nigeria over the fine.

Nigeria is MTN's biggest market  (Image credits: AFP)

PREMIUM TIMES reports that Sifiso Dabengwa, the Group Chief Executive Officer of telecom company, MTN, has resigned following the massive ₦1.04 trillion (US$5.2 billion) fine imposed on the company by the Nigerian Communications Commission, NCC.

MTN was sanctioned by the Nigerian government for failing to disconnect 5.1 million unregistered subscribers.

Non-Executive Chairman, Phuthuma Nhleko, will act as executive chairman for a maximum period of six months while the company identifies a successor to Mr. Dabengwa, MTN said in a statement issued in Johannesburg on 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,” Mr. Dabengwa was quoted as saying in the statement.

MTN has until Nov. 16 to pay the Nigeria penalty, which relates to the timing of the disconnection of 5.1 million subscribers and is based on a charge of ₦200,000 (US$1,008) for each unregistered customer. The company’s shares lost almost a quarter of their value following the disclosure of the fine, before a partial recovery.

“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,” Nhleko said.

MTN said it will continue to inform shareholders of any engagements with the Nigerian government, the company said.

The company has up to November 16 to pay up.

Last week, the South African bourse suspended trading in the shares of telecoms firm MTN following the huge fine.

MTN is Africa’s biggest phone operator, and derives its largest (a third) earnings from Nigeria.

The NCC had in August directed mobile telecoms companies to deactivate all unregistered SIM cards or face severe sanctions.

MTN missed the deadline to deactivate its unregistered subscribers, prompting a ₦200,000-naira (US$1,000) fine for each unregistered SIM.

MTN’s shares fell sharply shortly after the fine last week, closing 12.49 percent lower at 167 rand — the lowest in several years.