The sudden resignation this week of MTN Group CEO Sifiso Dabengwa over the Nigeria $5.2 billion fine fiasco resulted in Africa’s largest mobile phone operator losing more than R80 billion of its market value. MTN old hand Phuthuma Nhleko has been put back in charge for six months to steady the ship, the question is who will take over after that? By Gugu Lourie
MTN has swiftly moved to install non-executive chairman and board member Phuthuma Nhleko at the helm of the company, while it tries to find an amicable solution with Nigerian authorities over the staggering US$5.2 billion fine.
MTN, which was fined for failing to deactivate SIM cards that were not complying with Nigerian laws, is still in talks with that country’s government ahead of the deadline to pay.
“The deadline set for the payment of the fine is November 16,” Nigerian Communications Commission (NCC) spokesman Tony Ojobo was recently quoted by AFP as saying.
As a trusted executive, Nhleko is expected to step in and sort out the mess in Nigeria, while the telco conducts a wider search for Dabengwa’s permanent replacement.
Maybe, the MTN board, will not cast its net too far in the search for a new chief executive – which has become something of a norm at the company.
I am inclined to believe that the interim executive chairman position given to Nhleko will be extended after the six months period.
It goes without saying that Nhleko will want to stabilise MTN.
After all he has bragging rights of being behind the “great” project that has created Africa and Middle East mobile phone giant, before handing over the CEO position to someone else.
Why would that be a case?
I am toying with a number of theories.
First, and most critical, Nhleko didn’t leave MTN after returning as non-executive chairman. He has always been keen to see his ‘project’ being bigger than it was before the Nigeria troubles surfaced.
MTN has until November 16 to pay the $5,2 billion fine for failing to deactivate SIM cards that failed to meet Nigerian laws.
But, could this be the opportunity for Nhleko to be the night in shining armour and rescue MTN in its time of deep need of leadership.
Then the big question is – does Nhleko want the position of CEO of MTN?
Obviously, we will only find the answer to this question when the board decides who the right man for the job is.
After all he once occupied this position before handing over the reigns to Dabengwa. This week Dabengwa threw in the towel over the Nigeria mess – as a result for the next six months Nhleko will be in charge at MTN.
That said, the fact that the board of MTN decided on the arrangement is a vote of confidence in Nhleko.
He is clearly prepared to rebuild and reclaim some of his relationships built when he took the leap of faith that saw MTN invest in Nigeria.
With MTN back in safe hands the hunt for a new CEO might fall down the priority list way past the six month period.
Another reason MTN won’t be too hasty in appointing a new permanent CEO is that competent locals, might not necessarily have the experience and know how to tackle the Nigeria fiasco.
There is nothing to suggest that Nhleko won’t be able assemble a solid team to solve the challenges being faced by MTN in Nigeria over not complying with subscribers’ registration leading to the multi-billion dollar fine.
Nhleko still has a few days to try and negotiate a way forward with Nigerian authorities.
That is why I do not think that MTN will have a new CEO in the next six months.
Furthermore, this could be a reality if analysts quoted by Fin24 are on the money.
“It was inevitable that heads would roll,” World Wide Worx MD Arthur Goldstuck told Fin24 on Monday in his reaction to Dabengwa’s resignation.
This could be a sign that the CEO was ineffective at moving ahead with negotiations with the Nigerian regulator or that he was pushed by the board, Goldstuck explains to Fin24.
While Steven Ambrose, CEO of research firm Strategy Worx, told Fin24 that it is no surprise that Dabengwa has quit.
“And I think this is the first of a couple of high-profile resignations, to be honest,” Ambrose said.
I wonder if MTN would by-pass top internal top executives for the position of CEO simply because they were part of Dabengwa’s team that landed the company on the wrong side of Nigerian regulations.
Perhaps potential candidates, save for Nhleko, might be best advised to wait until the Nigerian storm has blown over before they raise their hands to be CEO.
One such candidate would be Karel Pienaar, MTN Group’s chief strategy, mergers and acquisition officer.
He has been an executive at MTN since 2001. Pienaar was deployed as a CEO of MTN Nigeria for a year to oversee the operation of the business after the licence was awarded in Nigeria.
It would make sense for MTN board to consider Pienaar for the position of CEO given his experience in Nigeria.
If the MTN board is looking at a highly experience executive, who is an outsider but has recently became a some sort of an insider at MTN, with no baggage of internal politics they could look to MTN Zakhele’s chairperson, Sindi Mabaso-Koyana.
Mabaso-Koyana, is an incredible leader and has an impeccable record as an executive in corporate South Africa.
Having her as a leader could give MTN an energy boost and fresh ideas going forward.
That said, one can throw a number of executive names in the hat to run MTN, but for now MTN is in safe hands under Nhleko.
Although, Nhleko appears keen to lead and solve MTN’s problems in Nigeria, South Africa and Iran, potential candidates shouldn’t give up just as yet.
Six months is a long time in business.