Customers register their MTN Group Ltd. mobile phone sim cards at a roadside kiosk in Lagos, Nigeria, on Saturday, Oct. 31, 2015. MTN, Africa's largest wireless operator, remains in negotiations with Nigerian regulators over a $5.2 billion fine for failing to comply with an order to disconnect customers with unregistered phone cards, according to a person familiar with the matter. Photographer: George Osodi/Bloomberg Customers register their MTN Group Ltd. mobile phone sim cards at a roadside kiosk in Lagos, Nigeria, on Saturday, Oct. 31, 2015. MTN, Africa's largest wireless operator, remains in negotiations with Nigerian regulators over a $5.2 billion fine for failing to comply with an order to disconnect customers with unregistered phone cards, according to a person familiar with the matter. Photographer: George Osodi/Bloomberg
Johannesburg - Embattled MTN’s largest shareholder, the Public Investment Corporation (PIC), had met with the mobile operator’s executive chairman, Phuthuma Nhleko, and discussed the recent developments at the company in Nigeria, the asset manager said on Friday.
The PIC did not comment specifically on the reports that MTN had its record fine in Nigeria increased by $500 million (R7.18 billion) to $3.9bn after the country’s telecoms regulator said a gremlin had set in in its communication, resulting in an incorrect penalty in an an earlier letter to Africa’s biggest cellular company.
The retirement fund manager said: “The PIC acknowledges the recent developments regarding MTN Nigeria. In particular, the PIC recognises the reduction of the fine imposed on MTN Nigeria and is happy that both MTN and the Nigerian Communications Commission (NCC) are in discussion to find a middle ground.”
The PIC, a 16.63 percent shareholder in MTN, said it noted the restructuring of the cellular operator’s operating structure, change in the management team and the resignation of MTN Nigeria chief executive Michael Ikpoki.
The PIC said: “We trust, however, that the changes that are taking place at MTN are meant to address some of the shortcomings that resulted in the imposition of the non-compliance fine.”
Penalty
“There was a typo,” NCC spokesman Tony Ojobo said on Friday, referring to a letter, dated December 2, that reduced the original $5.2bn penalty to $3.4bn.
“The reduction should have been 25 percent. We saw the mistake and had to fix it.”
The first letter reduced the hefty fine by 35 percent.
MTN received a second letter on Thursday, which superseded the first one and increased the fine to $3.9bn, MTN said.
The payment is due on December 31.
The regulator imposed the penalty on MTN for failing to meet a deadline to disconnect 5.1 million unregistered subscribers as Nigerian security agencies seek to fight crime in a country with poor identity records. Nhleko is leading negotiations with the NCC after chief executive Sifiso Dabengwa resigned.
The initial fine of $5.2bn was more than MTN’s sales in Nigeria last year and the equivalent of about half the company’s total revenue.
Nigeria’s presidency approved the reduction of MTN’s record fine by 25 percent, showing goodwill towards the company after it breached the law and endangered security, Ojobo said.
MTN is not prepared to pay the revised $3.9bn fine and will continue to seek a compromise, according to a person familiar with the matter.
“Neither the first letter nor the second letter sets out any details on how the reduction was determined,” MTN said.
MTN shares fell 3.9 percent during Friday trade to the lowest since November 17, before recovering to close 3.04 percent down at R125.74. The stock has fallen about 30 percent since the fine was made public on October 26.
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