MTN’s Largest Shareholder Instigates Board Changes

• MTN’s Largest Shareholder Instigates Board Changes

MTN’s largest shareholder, Public Investment Corp., is pushing for the restructuring of the leadership of mobile phone company to avoid the regulatory, legal and political disputes on the continent.

The PIC built a 26 per cent stake in Johannesburg-based company in late November and used the opportunity to call for the replacement of the Board Chairman, Phuthuma Nhleko, people familiar with the matter told Bloomberg.

It was gathered that Africa’s biggest fund manager, which is South African state-owned, also sent a letter to MTN demanding a board reorganisation, which resulted in the appointment of more politically-connected directors.

Last month, the network operator, announced Nhleko’s planned exit and replacement, along with other director changes and the introduction of a new separate group of prominent advisers.

The PIC didn’t respond to a request for comment. Nhleko declined to comment, Bloomberg said.

Interactions with the PIC have been at the board level, MTN Chief Executive Officer, Rob Shuter, said in an interview in London last week.

“An important thing for them was on our board evolution,” he said. MTN’s media office didn’t comment further.

The PIC was moved to act following a series of disputes in Nigeria, Iran and Uganda, with the biggest fine of $5.2bn in Nigeria in October 2015, which was eventually settled for less than $1bn after negotiations and was completely paid off on May 24, 2019.

The PIC, which manages the pension funds of South African government workers, wants the new chairman, former South African Deputy Finance Minister, Mcebisi Jonas, and the board to resolve outstanding issues such as a $2bn tax dispute in Nigeria, the sources said.

MTN’s separate advisory board is a council of “wise old men,” who can directly contact lawmakers and decision makers in the countries where MTN operates, one of the people said.

MTN Group had announced significant changes to its Board of Directors with the Emir of Kano, His Royal Highness Sanusi Lamido Sanusi, resuming on the board by July 1, 2019.