MTN Nigeria fine cut 35% to $3.4 billion as local CEO quits, and firm seeks further reduction

The initial fine of $5.2 billion was more than MTN’s total sales in Nigeria in 2014 and equivalent of about 37% of the group’s total revenue.

MTN Group Ltd., Africa’s largest phone company, is working to further reduce a record fine imposed by Nigerian authorities even after the penalty was cut by 35% to $3.4 billion, according to a person familiar with the matter.

The wireless operator is also considering further management changes as it deals with the fallout from the Nigeria dispute, said the person, who asked not to be identified as the matter is private.

Executive Committee member and 21-year company veteran Karel Pienaar has retired from Johannesburg- based MTN, following the departures of Chief Executive Officer Sifiso Dabengwa, Nigeria CEO Michael Ikpoki and Akinwale Goodluck, the head of regulatory and corporate affairs.

MTN spokesman Chris Maroleng declined to comment. Pienaar, who joined MTN when the company was founded in 1994, confirmed he has left the company and said he felt “privileged” to have worked in the industry, according to a text message on Thursday.

Shares extend decline

MTN shares extended their declines, valuing the company at 264 billion rand ($18.4 billion). The stock is down about 25% since the penalty was made public on Oct. 26.

The Nigerian Communications Commission imposed the fine on MTN for failing to meet a deadline to disconnect 5.1 million unregistered subscribers. 

Chairman Phuthuma Nhleko took an executive position in November and led negotiations with the regulator after Dabengwa quit. The initial fine of $5.2 billion was more than MTN’s total sales in Nigeria in 2014 and the equivalent of about 37% of the group’s total revenue.

The regulator should order MTN to “commit to a speedier ramp up of 3G tower roll out,” money manager Vestact Ltd. said in a note. “That way the government can use the services provided by a private company to improve their fight against terrorism and corruption.”

MTN named Ferdi Moolman, the former CEO of the company’s Iran unit and most recently the chief financial officer of MTN Nigeria, as head of the Lagos-based operations. He will be joined in Nigeria by Karl Toriola, a new regional vice president reporting to Nhleko. Matthew Odgers, a former UBS Group AG investment banker, will take over responsibility for mergers and acquisitions at the company.

-Bloomberg

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