MTN Faces Another Hefty Fine In South Africa For Insider Trading
MTN Group faces a hefty fine in South Africa if the regulator confirm that there were cases of insider trading on the firm’s shares at the Johannesburg Stock Exchange (JSE) before it announced it had been fined a record $5.2 billion in Nigeria.
MTN, Africa’s largest mobile phone services company, was last week slapped with the largest fine any African company has ever faced by the Nigerian Communication Commission (NCC) for allowing 5.1 million subscribers in the West African nation to continue using unregistered SIM cards after a deactivation deadline expired.
The JSE launched an investigation on Friday for “possible insider trading” before the South African telecoms firm announced that it had been hit by the fine in Nigeria, AFP Reported.
MTN Group shares plunged more than 20 percent last week, shedding more than $4.2 billion off its market value, after the news broke on Monday morning in Nigeria before the company notified its shareholders about the price-sensitive information.
“The market regulation team is looking into trades that took place before the announcement in order to determine if there is any evidence of possible insider trading,” Peter Redman, Johannesburg Stock Exchange (JSE) market regulation advisor, said in a statement.
Amy Cameron, a telecoms analyst at London-based BMI Research, told AFP that the JSE insider trading investigation, which might take months, “puts the company under additional pressure”.
The NCC fine also raised questions about the renewal of MTN’s operation license in Nigeria next year if the amount is not paid up.
The Nigerian regulator said on Friday it had given MTN, the largest telecoms operator in the country with more than 63 million subscribers, until Nov. 17 to pay the fine. It however said the outcome of the JSE investigation could affect the deadline.