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Johannesburg - Africa’s biggest mobile network MTN [JSE:MTN] said it’s group chief executive officer, Sifiso Dabengwa, is in talks with Nigerian authorities over a $5.2bn fine.
The Nigerian Communications Commission (NCC) has fined MTN 1.04 trillion naira ($5.2bn; R71bn) related to alleged delayed disconnections of up to five million unregistered subscribers.
Nigeria's telecoms regulator has also set a November 16 deadline for MTN to pay the fine, according to an AFP report.
And since MTN confirmed the fine on Monday, the company has seen billions wiped off its market capitalisation as its share price closed on October 29 at R155.39, down from its five day trading peak of R192.45 on Friday October 23 at 13:30. MTN has also suffered credit downgrades from the likes of S&P this week.
Furthermore, Nigeria is MTN’s biggest market with over 60 million subscribers, according to the company’s latest quarterly update.
“Further to the SENS announcement which the company issued on October 26 2015, relating to this matter, shareholders are advised that the group CEO is engaging with the Nigerian authorities on the regulatory aspects of this matter,” said MTN in a market update on Friday morning.
“In addition, senior management of the company and its advisers are currently engaging with the JSE Limited on the timing of the aforementioned SENS announcement. The company will update shareholders through SENS on these engagements as soon as possible,” said MTN.
Criticism over announcement
MTN’s comments on engaging with the JSE come after the stock exchange earlier this week said it had a “focused conversation with the sponsors (Deutsche Securities) in the interest of MTN shareholders”.
MTN was criticised by some analysts over its timing of a SENS announcement on Monday regarding the fine in Nigeria.
Even though a story about the fine was reported in Nigeria’s Technology Times on Sunday October 25, MTN’s JSE SENS announcement of the fine came at 14:24 on Monday October 26.
“I don`t think MTN handled the announcement of this fine particularly well as there were no cautionary announcement to give shareholders an indication of a possible fine,” Kirk Swart, an investment advisor at Overberg Asset Management, told Fin24 late on Thursday.
“However, that being said, the fine will not really affect MTN`s long term business in Nigeria as the underlying earnings drivers are all still intact,” Swart said.
By mid-morning trade MTN's share price was up 1.39% to R156.53.
