Telecom firm suspends Nigeria dividend payout, brings forward CEO start date

October 24, 2016 5:43 AM

MTN agreed to pay 330 billion naira ($1.08 billion) to end a long running dispute over unregistered SIM cards in Nigeria

A customer leaves an MTN shop in Johannesburg April 10, 2012.

MTN Group's next chief executive will take over three months ahead of plan, the South African telecoms company announced on Monday, as the firm faces allegations it illegally moved $14 billion out of Nigeria.

Rob Shuter, Vodafone European boss, was due to start in July next year but MTN said in a statement accompanying its quarterly update he would now start on 13 March 2017.

South Africa-born Shuter, a banker with risk management background, will inherit a company that is the subject of a parliamentary investigation in Nigeria on whether it unlawfully repatriated $13.97 billion between 2006 and 2016.

"MTN Nigeria continues to refute the allegations that MTN Nigeria had improperly repatriated funds from Nigeria," the company said in its quarterly update.

"Consequently MTN Nigeria will strongly defend any action that would be prejudicial to its interest."

The crux of the allegation is that MTN did not obtain certificates declaring it had invested foreign currency in Nigeria within a 24-hour deadline stipulated in a 1995 law and therefore the repatriation of returns on those investments was illegal.

MTN this year agreed to pay a reduced fine of 330 billion naira ($1.08 billion) to end a long running dispute over unregistered SIM cards in Nigeria.

Shares in the company have fallen by more than 14 percent to their lowest level in more than six years since the latest issue surfaced on Sept. 27.

MTN also said it had suspended dividends payouts from Nigeria, where it runs the biggest wireless phone network and which generates a third of its annual sales.

The company reported a slight fall in third-quarter user numbers due to a weaker showing in South Africa, where it vies for market share with Vodacom and Cell C.