Shares in MTN Group declined 2.7% in morning trade on the JSE following the announcement late on Monday (23 July) of the resignation of its chief financial officer, Nazir Patel, under a cloud of controversy.
By 10:15am, shares in MTN declined 2.7% or R4.85 to R175.15 on the local bourse, having reached a new record high of R190.76 on 7 July. The All Share Index added o.3% to 41,017 points.
MTN advised late on Monday (22 July) that group CFO and executive financial director, Patel, had stepped down from his post effective immediately, amid an internal investigation.
“Patel explained to the company that he does not wish his continued employment with the company to prejudice the company in respect of certain allegations made against him, which are subject to an ongoing investigation which had been commissioned by the company,” MTN said in a statement.
Brett Goschen has been appointed as Group CFO and executive financial director on the Board.
A trader at PSG Konsult said that the market has perceived the resignation as a negative for the company. “MTN is down on the back of that resignation and on an impending investigation by the group.”
He said that MTN has come under fire for the way it conducts business in emerging markets. “It is prepared to stick its head out, and if you do business in the Middle East, in Africa, in Nigeria, this is what one should expect.”
However, the trader added that MTN continues to be a good investment. “We still like MTN because of its growth and exposure to emerging markets.”
MTN operates in 22 countries in Africa and the Middle East and at the end of April it had in excess of 197 million subscribers.
Shares in MTN have gained 42.3% or R52 over the past year, while the group has a market cap of R329.5 billion.