Brief respite for MTN on $5-billion fine

A week after he took over as executive chairman, Phuthuma Nhleko secured a temporary reprieve in Nigeria from paying a $5,2-billion fine.

The company says the regulator had agreed to extend the deadline for the payment, which was due on Monday.

MTN was fined by the Nigerian Communications Commission for not disconnecting unregistered SIM cards.

It says the Nigerian authorities had, “without prejudice, agreed that the imposed fine will not be payable until the negotiations have been concluded”.

MTN is still in discussions with the regulator and was committed to resolving the matter “as soon as possible”, it says.

Discussions included “matters of non-compliance and the remedial measures that may have to be adopted to address this”.

JM Busha head of equities, Farai Mapfinya, says the deadline extension was “very encouraging” and showed that the discussions could be positive. “Unfortunately it is not conclusive but the reprieve points to a fruitful engagement between MTN and the Nigerian regulator.”

There were reports at the weekend that MTN had asked for a staggered payment plan for the fine. But the group has since denied this.

MTN’s stock has lost 13,41% since it confirmed the fine four weeks ago. On Monday the stock closed at R144.60, which was less than 1% down. The JSE is also investigating the timing of the issuing of the fine.

Nigeria is MTN’s biggest market with 62-million customers. Nigerian authorities are demanding that every cell phone customer be registered as a crime-curbing measure.

The fallout over the fine led to the resignation of MTN Group CEO Sifiso Dabengwa last week.

But more heads could roll as the group’s largest shareholder, the Public Investment Corporation, has put pressure on the company and wants more people to take collective responsibility for the fine.

Nhleko, who will be in charge at MTN for six months until a new CEO is appointed, says last week the group was “getting to the bottom” of what might have transpired and hoped to resolve the impasse in weeks.

By Thabiso Mochiko for www.bdlive.co.za

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