MTN draws up CEO shortlist: report

MTN has drawn up a shortlist of three potential candidates to take up the position as Group CEO – replacing acting executive chairman, Phuthuma Nhleko.

Bloomberg has reported that Nhleko plans to step down as early as next month, citing to a person familiar with the matter.

The media company said that MTN has a shortlist of three candidates to become the new CEO – two are from within MTN and one is external, the person said.

Bloomberg said that Nhleko is confident that MTN is close to ending negotiations over a $3.9 billion fine in Nigeria.

Shares in the company advanced R2.35 or 1.75% to R136.85 in midday trade on the JSE on Thursday.

Speaking at MTN’s annual results presentation on Thursday (3 March) Nhleko said the search for a new CEO is well underway, with an announcement expected in the second quarter of 2016.

The company head said that finding the right group CEO is critical for MTN’s success, with Nhleko adding that his role was a temporary one as the company faced its “most difficult year in history”.

Nhleko – a former MTN CEO – was elected as executive chairman in a temporary capacity at the group, following the resignation of Sifiso Dabengwa as group CEO in November 2015.

He took up the responsibility to proactively deal with the Nigerian regulators regarding a ₦1.04-trillion (around R71-billion at the time) fine imposed on the company in October 2015 for not disconnecting unregistered SIMs on its network.

After negotiations with Nigerian authorities, the fine was reduced by 25% to ₦780-billion.

Dabengwa stepped down as the company hit peak crisis mode around the Nigerian fine, saying that he was resigning in the interest of the company and its shareholders.

MTN Nigeria executives, including CEO Michael Ikpoki, and head of regulatory and corporate affairs Akinwale Goodluck, also stepped down.

The MTN Nigeria fine saga had a profound impact on MTN’s financial results, with the company reporting a massive 51% drop in profits.

This was largely due to a R9.3 billion provision made for the fine, as well as a R4 billion “good will payment” made to Nigerian authorities in a bid to soften their stance on the matter.

However, even excluding the Nigerian regulatory fine provision, the group’s headline earnings still declined 25,3%, MTN said.

Group revenue remained flat in the year largely due to a decline in voice revenue in Nigeria and a reduction in handset revenue in South Africa – though the disconnection of over 10 million subscribers in Nigeria and Uganda did not stop the group from growing its subscriber base by 4.1% to 232.5 million.

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MTN draws up CEO shortlist: report