Although it got a major respite in its effort to get the $5.2 billion (N1.04 trillion) fine reduced, MTN Nigeria, has, however, lost its indigenous Chief Executive Officer (CEO), Michael Ikpoki, and its Corporate Service Executive, Akinwale Goodluck. They both resigned their appointments late Wednesday night.
After securing a 35 per cent reduction of the fine, MTN will now pay N647 billion ($3.4 billion) in what many considered a lucky break for the company.
According to an NCC source, so many factors were actually considered for the slash, these included the appeal for leniency by MTN and that the regulator should tamper justice with mercy in the letter dated November 2, 2015 sent to the commission.
The source also disclosed that MTN actually asked for 70 per cent slash in the fine, “but government insisted no, but for diplomacy sake and possible interaction between President Muhammadu Buhari of Nigeria and Jacob Zuma of South Africa, may have also contributed to the reduction of the fine. This is because the order to slash the fine was actually from the Presidency. It came on Wednesday evening.”
According to the source, it was agreed that MTN must as a matter of urgency, disconnect the 5.1 million defective SIM cards from its network.
The fine was imposed by the Nigerian Communications Commission (NCC) as a penalty for MTN’s contravention of regulatory orders after several warnings from the regulator to the firm to disconnect about 5.1 million subscribers found to have pre-registered Subscribers Identification Module (SIMs) cards and incomplete registration details on its network.
This led to the NCC’s slamming of the fine on the telecommunications firm for the defective SIMs at the cost of N200, 000 each.
MTN in a statement, yesterday signed by its Executive Chairman, Phuthuma Nhleko, sent to shareholders, and made available to journalists, disclosed that following their ongoing engagement with the Nigerian authorities, the telecommunications firm had been issued with a letter reducing the fine to $3.4 billion.
Nhleko said MTN was still in the process of considering this and following due processes internally.
Meanwhile, as The Guardian had reported earlier about imminent shake-up in the management team of the Nigerian arm of the firm following the forced resignation of the former Group CEO of the company, Sifiso Dabengwa, it was learnt yesterday that both Ikpoki and Goodluck, were also forced to quit for what an insider described as their ‘shoddy handling’ of the SIM cards debacle.
A reliable source said the management of MTN Group was not pleased with the way the fine issue was handled, thus generating a controversy within the management level.
In Nigeria, the source said the MTN management was equally not happy with the way the matter was handled, a development that has put Ikpoki under pressure in the last one month before he was said to have been forced to resign on Tuesday.
Before his appointment as the first indigenous MTN Nigeria CEO in July 2013, Ikpoki was appointed the head of the firm in April 2011 after running MTN Nigeria’s sales and distribution channel as its executive from 2006.
He joined MTN in 2001 as a regulatory advisor after a six-year stint with the NCC’s legal division .He took over in Nigeria from Brett Goshen. Ikpoki has been replaced by Ferdi Moolman as MTN Nigeria CEO and Amina Oyagbola as its Head of Regulatory and Corporate Affairs.
Moolman was previously Chief Operating Officer (COO) at MTN Irancell and most recently Chief Financial Officer (CFO) at MTN Nigeria.
A Nigerian, Oyagbola also retains the position of MTN Nigeria’s Head of Human Resources.
She formerly headed regulatory affairs at the Nigerian operating company. The restructuring, however, cuts across major operating countries of the telecommunications firm.
The Minister of Communications, Adebayo Shittu, had last week, disclosed that MTN’s fate on the fine would be determined by Buhari in ‘public interest’ and at an appropriate time.
Already, the firm has started the disconnection of more SIMs it considers defective, as witnessed in the besieging of several MTN outlets in the country by subscribers, whose lines have been barred.
Some of the subscribers claimed that it was the sixth time they were re-registering their lines, urging MTN to find a lasting solution to the problem.
Meanwhile, following the reduction of the fine, MTN’s shares gained 1.2 per cent to 148.49 rand as of 9:32 a.m. in Johannesburg, valuing the company at 274 billion rand ($19.1 billion). Although the stock is still down about 22 per cent since the penalty was made public on October 26.
Nhleko told MTN shareholders that the company had received a formal letter dated December 2, 2015 from the NCC informing the company that, after considering the company’s request, it had taken the decision to reduce the fine on the MTN Nigeria business from the original N1, 040,000,000,000 to N674 billion, which has to be paid by December 31, 2015. He reiterated that the fine related to the late disconnecting of 5.1 million MTN Nigeria subscribers in August and September 2015.