MTN denies reports that the PIC meddled with its board

MTN has hit back at media reports that the Public Investment Corporation (PIC) has been involved in forcing changes to the mobile group’s board.

Bloomberg reported on Tuesday (5 June) that the PIC was pushing for changes to the MTN’s board to avoid the regulatory, legal and political disputes that have cut its share price by more than half over the past four years.

Citing unnamed sources “familiar with the matter”, Bloomberg reported that the PIC, through its 26% stake in the group, put pressure on MTN to replace group chair Phuthuma Nhleko, seeking more politically connected members.

This was behind the recent appointment of former deputy finance minister Mcebisi Jonas as the group’s new chair, as well as the introduction of an International Advisory Board (IAB) that featured political heavyweights like former president Thabo Mbeki.

Read: MTN top investor forced board shakeup to curb disputes

However, MTN has now strongly denied these claims, saying that the Bloomberg report was based on “unsubstantiated rumours and inaccuracies”.

“MTN regularly engages with its shareholders where we have robust, constructive, open and transparent discussions about the business. A key part of that engagement is the governance roadshow with investors that, over the last two years, has been held ahead of the AGM.

“During these roadshows MTN Group engages with the PIC and other major investors on matters of governance, strategy and financial performance,” it said.

The company said that contrary to what the Bloomberg report claims, the PIC pushed for MTN chairman Phuthuma Nhleko, to hold his position for a term longer than he had intended.

“MTN Group applied its mind on the request, and considering other issues around the board evolution, asked Phuthuma Nhleko to stay until the 15 December 2019 to ensure an orderly hand-over to the Chairman designate, Mcebisi Jonas,” it said.

On the matter of the IAB, MTN said that the purpose of the IAB is to provide general global and/or sector specific perspectives that may enrich the perspectives of the operating company’s Board as it strives to contribute to certain areas of development in the countries in which it operates.

“The construct of an IAB is one that is adopted by a number of global multinationals that operate in varied and multiple jurisdictions across the world.

“While this is not prevalent in South African domiciled companies, such Boards advise a number of global companies quoted on major global bourses. The IAB was conceptualised by the MTN Board before the PIC increased its shareholding in MTN,” it said.

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MTN denies reports that the PIC meddled with its board