Oops!: MTN Investors calls for new leadership

MTN Investors calls for new leadership. this came about in October, when Nigeria slapped the company with a $5.2 billion fine — an unheard of amount equal to double the cash on MTN’s records.

Phuthuma Nhleko spent more than a decade building MTN Group into Africa’s biggest wireless operator by rushing into markets few rivals would touch, from Syria to Afghanistan to South Sudan. Now his appetite for risk has come back to haunt him, and shareholders are calling for a different approach.

Ex chairman Nhleko, who had stepped aside as chief executive officer, returned to sort out the mess and line up a new CEO, giving himself six months. 

With that deadline past and no signs of progress, investors will be looking for answers at the company’s annual meeting on Wednesday. Nigeria said last week negotiations on the now-$3.9 billion fine are still on hold as MTN stock has lost almost one-third of its value.

Short-seller Jim Chanos says the missteps have rattled investors like Nick Crail, a money manager at Johannesburg-based Ashburton Investments. He’s concluded that MTN needs to bring in an outsider to run the company and make changes to the board to tame its aggressive strategy. By doing so, Nhleko could show that MTN has a game plan that it can execute — essentially, that it is growing up.

The Nigerian regulator fined MTN for moving too slowly to disconnect customers unregistered in the country, which is battling an Islamist insurgency. 

A resolution may still be far off. Nigeria has suspended talks on the fine while the country’s House of Representatives completes an investigation into the size of the penalty and how it was delivered, a spokesman for the Ministry of Communications said on Friday. MTN spokesman Chris Maroleng, in a statement on Monday, said the company “cautions shareholders not to make any decisions based on media reports.” 

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