Sifiso Dabengwa, the Group Chief Executive Officer of telecom company, MTN, has resigned following the massive N1.04 trillion ($5.2 billion) fine imposed on the company by the Nigerian Communications Commission, NCC.
MTN was sanctioned by the Nigerian government for failing to disconnect 5.1 million unregistered subscribers.
Non-Executive Chairman, Phuthuma Nhleko, will act as executive chairman for a maximum period of six months while the company identifies a successor to Mr. Dabengwa, MTN said in a statement issued in Johannesburg on Monday
“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,” Mr. Dabengwa was quoted as saying in the statement.
MTN has until Nov. 16 to pay the Nigeria penalty, which relates to the timing of the disconnection of 5.1 million subscribers and is based on a charge of 200,000 naira ($1,008) for each unregistered customer. The company’s shares lost almost a quarter of their value following the disclosure of the fine, before a partial recovery.
“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,” Nhleko said.
MTN said it will continue to inform shareholders of any engagements with the Nigerian government, the company said.
The company has up to November 16 to pay up.
Last week, the South African bourse suspended trading in the shares of telecoms firm MTN following the huge fine.
MTN is Africa’s biggest phone operator, and derives its largest (a third) earnings from Nigeria.
The NCC had in August directed mobile telecoms companies to deactivate all unregistered SIM cards or face severe sanctions.
MTN missed the deadline to deactivate its unregistered subscribers, prompting a 200,000-naira ($1,000) fine for each unregistered SIM.
MTN’s shares fell sharply shortly after the fine last week, closing 12.49 percent lower at 167 rand — the lowest in several years.