MTN’s fine saga takes a new twist as fine is decreased to $3.92bn (not $3.4bn)

In October this year, Nigeria’s largest telecommunication provider, MTN, was fined a record fee of $5.2 bn for failing to comply with National Communication Commission (NCC) directives. According to the NCC, the telecommunication provider failed to comply with a 12 month to ensure that only SIM cards with valid SIM registration details should be active on its network.

This fine which is regarded as the most inflated in telecommunications history is a massive blow to MTN since Nigeria is its largest and profitable market. The fine led to a 16% drop of the company’s share on the Johannesburg Stock Exchange.

After months of negotiation, it was reported yesterday that the Nigerian Communications Commission (NCC), sent in a letter stating a reduction of the $5.2bn fine by 35 percent to $3.4bn. Barely 24 hours after the announcement, MTN issued a statement that revealed the Nigerian Communications Commission (NCC) sent a second letter stating the fine had actually been reduced by 25 percent to 780 billion naira ($3.92 billion) and not by 35 percent to $3.4bn.

Following the reduction, MTN has been given a new deadline of December 31st to pay this fine but its newly appointed Executive Chairman; Phuthuma Nhleko expressed his dissatisfaction and plans to negotiate with the Nigerian government before responding.

The imposition of this fine also led to a major management shake-up. Karel Pienaar, Executive Committee member, the Chief Executive Officer, Sifiso Dabengwa, Nigeria CEO, Michael Ikpoki and Akinwale Goodluck, the head of regulatory and corporate affairs all resigned yesterday because of the controversy. Ferdi Moolman has been announced as the new Nigeria CEO while Amina Oyagbola takes over as the head of regulatory and corporate affairs. Moolman was previously the chief operations officer at MTN Irancell, and chief financial officer at MTN Nigeria.

Shareholders have been advised to exercise caution when dealing in the company’s securities until a further announcement is made.

While MTN operations have been affected by the fine, so have Nigerian subscribers who ahve complained that their lines have been barred:

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