JOHANNESBURG, June 20, 2016 – MTN Group named the head of Vodafone Europe as its new CEO on Monday, bringing in an outsider with a risk management background less than two weeks after it agreed to a $1.7 billion fine to settle a dispute in Nigeria.
Rob Shuter, a South African national with a background in accounting, replaces Sifiso Dabengwa, who resigned last November after Nigeria imposed the fine, the latest in a series of disputes exposing governance issues at Africa’s biggest mobile phone operator.
The telecommunications firm is trying to overhaul its corporate governance standards while looking for new revenue streams as competition hits profit margins in its key markets.
The Nigerian fine, originally set at $5.2 billion, was imposed after MTN missed a deadline to cut off users with unregistered SIM cards.
Nigerian authorities have been cracking down on unregistered cards on concerns they are being used for criminal activity in a country battling an insurgency by Islamist militant group Boko Haram.
MTN has also faced run-ins with authorities in other countries where it operates, including Uganda and Cameroon.
“MTN has weathered a rather difficult storm and will continue to review its governance and management operating structure,” Executive Chairman Phuthuma Nhleko said in a statement, backing the appointment of Shuter.
Nhleko, who was appointed interim executive chairman following Dabengwa’s resignation with an eye to renegotiating the fine in Nigeria, will revert to his role as non-executive chairman as soon as Shuter starts his new role by July 2017.
Shuter, who was head of investment banking at Standard Bank and head of retail banking at Nedbank, has been CEO of Vodafone Netherlands since April 2012. In October 2015, his role was expanded to include the other European countries excluding the UK, Italy, Spain and Germany.
Shares in MTN rose to as high as 151.70 rand shortly after the news, before giving all gains to trade nearly 1 percent lower at 143.30 rand. The blue chip JSE Top-40 index was up 1.2 percent.
Abax Investments, a Cape Town-based asset management firm that holds shares in MTN, welcomed the appointment.
“Given his background and track record we’d be sure Rob will fit in very well at MTN,” said Anthony Sedgwick, a founding member of Abax, with assets worth more than $5 billion.
Founded with the government’s help after the end of apartheid in 1994, MTN was touted as one of South Africa’s biggest corporate success stories.
But the company, which counted South Africa’s deputy president Cyril Ramaphosa as a shareholder and board member until at least 2013, has been caught in the middle of controversies over its businesses in Iran, Syria and most recently in Nigeria.
In 2013, Turkish rival Turkcell unsuccessfully sued MTN for $4.2 billion, alleging it was a victim of corruption and bribery that caused it to lose an operating licence in Iran.