Non-executive chairman Phuthuma Nhleko was named executive chairman of MTN for a period of up to six months after Sifiso Dabengwa stepped down as CEO with immediate effect on Monday.
The priority for Nhleko will be trying to get a reduction in the fine demanded by the Nigerian Communications Commission (NCC). Nigeria, Africa’s most populous nation, is MTN’s largest market and contributes more than a third of its revenues.
The Nigerian regulator has been pushing cell phone network companies to verify the identity of their subscribers because of fears that unregistered SIMs were being used for criminal activity in a country facing Islamic militant group Boko Haram’s insurgency.
MTN’s largest shareholder, South Africa’s Public Investment Corporation (PIC), said on Monday it wanted to meet with Nhleko about his plans to tackle the fine and wants more staff at MTN to take responsibility for the penalty.
“A lot more people need to take collective responsibility for the fine… for the alleged failure to comply with regulatory requirements,” the PIC’s chief executive Daniel Matjila said in a statement.
Shares in MTN have slid by nearly 20 percent since Oct. 26 when the charge was first reported, but were up 1.4 percent at 159.65 rand by 1349 GMT on Monday, following news of Nhleko’s appointment.
Dabengwa had been chief executive of MTN since 2011 when he took over from Nhleko.
“Due to the most unfortunate prevailing circumstances occurring at MTN Nigeria, I, in the interest of the company and its shareholders, have tendered my resignation with immediate effect,” Dabengwa said in a statement.
In his nine years as chief executive, Nhleko was largely credited with the company’s expansion outside its home market. The firm spans more than 20 countries, including Iran.
“Obviously having only six months he’s there to do something about the fine,” Momentum SP Reid analyst Sibonginkosi Nyanga said. “He’s the guy who built MTN into what it is.”
MTN also faces a Johannesburg bourse investigation on the timing of its announcement of the penalty.
Ratings agencies Moody’s and Fitch lowered MTN’s credit rating outlook to “negative” last month flagging the risk of significant cash outflow and the likely damage to the Nigerian business due to lengthy talks.
South Africa’s government has said it was concerned about the fine but said this would not affect relations between the continent’s two biggest economies.