Telecommunications firm, MTN, has disclosed that the Nigerian Communications Commission (NCC) has agreed to extend the deadline given to it to come up with the sum $5.2 bvillion for failure to cut off non-registered lines on its network before a deadline issued to all mobils operators to do so by the commission.
MTN in a statement sent to its shareholders, Monday, said NCC had waived the November 16 deadline to settle a $5.2bn fine adding further that negotiations between the two sides continue.
“Shareholders are advised that the Nigerian authorities have, without prejudice, agreed that the imposed fine will not be payable until the negotiations have been concluded,” the Johannesburg-based company said in a statement on Monday.
“These discussions include matters of non-compliance and the remedial measures that may have to be adopted to address this.”
NCC imposed the penalty on MTN for failing to meet a deadline to disconnect 5.1 million unregistered subscribers.
The company’s shares have lost almost a quarter of their value since the fine was made public on October 26, while CEO Sifiso Dabengwa announced his resignation a week ago.
Chairperson Phuthuma Nhleko agreed to take over at MTN four years after ending a nine-year spell as CEO, during which the share price gained about 1 000%. He vowed to lead negotiations with the NCC and has met with the regulator, MTN said.
“Shareholders are advised that the Executive Chairman of the Company, Mr Phuthuma Nhleko, has personally met with the Nigerian authorities to continue the ongoing discussions with them regarding the fine of N200,000 for each unregistered subscriber (“the fine”), the equivalent of US$5.2 billion imposed on MTN Nigeria by the Nigerian Communications Commission (“NCC”). These discussions include matters of non-compliance and the remedial measures that may have to be adopted to address this,” the statement continued.
Late on Sunday, MTN denied a media report that the company had asked for a staggered payment plan for the fine.
It would be recalled that less than a week after stepping into his former role as MTN chief executive, Phuthuma Nhleko flew to Nigeria last Thursday to try to negotiate with authorities to reduce the $5.2 billion fine slapped on Africa’s largest mobile operator.
The fine, due to be paid MOnday, was imposed by the Nigerian Communications Commission after the mobile giant failed to deactivate 5.2 million improperly registered SIM cards.
The company’s spokesperson, Chris Maroleng, confirmed Nhleko’s Nigeria visit but could not shed any light on when he was expected to return to South Africa.
“With regard to Mr Nhleko, he is in Nigeria and has travelled there as part of the continued engagements with our operations in that country. Our position is that we continue to be engaged with the authority in Nigeria.”
Nhleko took over the reins at MTN following the sudden resignation of Sifiso Dabengwa as chief executive on Monday, citing “the most unfortunate prevailing circumstances occurring at MTN Nigeria” as the reason for his departure.
Nhleko’s visit to Nigeria comes amid reports that a section of telecoms subscribers – part of the National Association of Telecommunications Subscribers (Natcoms) in Nigeria – filed a lawsuit against the commission over the fine it imposed on MTN Nigeria.
According to reports, Natcoms wants the Federal High Court in Nigeria to stop the commission from imposing the fine on MTN and to “compel the [commission] to account for all the monies it has collected as fines from telecoms operators since 2002, and to pay such monies to subscribers as compensation for poor service quality”.
Maroleng said MTN had “taken note of that [Natcoms] report and our colleagues in Nigeria are monitoring the developments”.
The return of Nhleko, who stepped down as MTN group CEO in March 2011 to make way for Dabengwa, saw an immediate impact on the company’s share price, which rose 1.4% on Monday after sagging by nearly 20% in the week prior to his appointment.
The Public Investment Corporation (PIC), one of the biggest shareholders in MTN, this week said it expected other executives to face the axe for the Nigeria debacle.
It issued the following statement: “While the PIC acknowledges that Mr Dabengwa’s resignation is the noble thing to do in the current circumstances, the PIC is of the view that a lot more people need to take collective responsibility for the fine that was imposed on MTN Nigeria for alleged failure to comply with regulatory requirements in that country.”
The corporation, which handles pensions for government employees, questioned how MTN’s board of directors had exercised its fiduciary duties and also why the company’s risk and compliance function did not foresee that noncompliance could lead to a penalty.
