In a release on Monday morning, MTN announced Sifiso Dabengwa’s resignation with immediate effect.
“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 the statement.
The company has named its chairperson and former chief executive Phuthuma Nhleko as executive chairman for a period of 6 months while it looks for a successor.
The company was fined $5.2-billion by the Nigerian Communications Commission (NCC) in late October, after it failed to meet the deadline to disconnect more than 5-million unregistered subscribers in the country.
Following the costly censure the company’s share price plummeted, prompting the JSE to suspend trading of its shares. It has since resumed trading, but on Friday its share price closed at R157.45, down from R161.50 in opening trade.
In the statement Nhleko said: “I will assume responsibility as executive chairman for the next 6 months as I proactively deal with the Nigerian regulator and will continue to work with them in addressing the issues around unregistered subscribers as a matter of urgency.”
He added that his second priority will be “to find an appropriate chief executive officer” after which he will return to his non-executive chairman role.
The Nigerian market has been a key growth arena for MTN where it has more than 62-million subscribers.
A number of reasons have been put forward to explain why the NCC took the decision to slap MTN with the hefty fine, when it did.
The threat of terrorist activity by Boko Haram, which uses unregistered cell phone accounts to communicate, has been viewed as a key reason why Nigerian regulators have taken such as determined stance against the company.
Other reasons include declining oil revenues – which make up the majority of the country’s revenue – and a push to find income from other sectors.
But despite the fine, last week MTN was granted the renewal and extension of its digital mobile license and operating spectrum in Nigeria until 2021.
MTN said that it would continue to inform stakeholders of any material engagements with the Nigerian authorities via the Stock Exchange News Service (SENS).
It warned shareholders to continue to “exercise caution when dealing in the company’s securities until a further announcement is made”.