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MTN Trading Resumes After Brief Suspension By JSE

MTN Trading Resumes After Brief Suspension By JSE

South Africa’s mobile telecommunications company MTN, the single most valued African brand, was suspended briefly on Monday from trading on the Johannesburg stock Exchange while being investigated for possible insider trading, Fin24 and EyewitnessNews reported.

Chris Maroleng, group corporate affairs executive at MTN Group, told Fin24 by phone that trading in the company’s shares had been suspended.

The JSE confirmed the suspension Monday.

Trading resumed later Monday, EyewitnessNews reported.

MTN’s share price was under pressure since it confirmed last week that the company has been fined $5.2 billion by Nigerian regulators for allegedly not disconnecting up to 5 million unregistered SIM cards, Fin24 reported.

The trading suspension came after MTN’s share price fell about 8 percent in trade Monday. An unconfirmed report by Lagos-based Vanguard Monday morning said that MTN had agreed to pay the $5.2 billion fine to Nigerian regulators in staggered payments.

The JSE offers a service that provides users with access to important company announcements that have a direct impact on movement in the market. These announcements include such things as mergers, takeovers, rights offers, capital issues, and notices of caution, according to the JSE.com. This service is called Stock Exchange News Service.

The stock exchange said it was looking into how MTN made its Stock Exchange News Service announcement last week regarding the Nigerian fine. The JSE also said it’s looking into trades before the Stock Exchange News Service announcement to determine if there was possible insider trading, according to Fin24.

Some analysts say MTN failed to make its Stock Exchange News Service announcement soon enough. News of the fine started appearing in Nigerian media early on Oct. 26 but MTN made its Stock Exchange News Service announcement later that day.

Based in Johannesburg, MTN operates in many African, European and Middle Eastern countries.

If MTN does pay the fine, it will have serious consequences for the multinational mobile network, said Gary Booysen, Rand Swiss portfolio manager, in an EWN report.

“Most market participants were expecting that there would be some sort of negotiation and some sort of leeway. So if it is true that they have bowed to the pressure and are going to pay the full quantity of the fine then I wouldn’t be surprised to see the stock being sold off quite aggressively as the market reopens,” Booysen said.

MTN is bewteen a rock and a hard place.

“It faces stiff regulatory pressure and very uncertain regulatory pressure and this definitely can’t be blamed on management,” Booysen told EWN. “We should look at the history in Nigeria as well. There have been times in the past for poor network quality.”

African publication African Business teamed up with South Africa-based Brand Africa to publish the Brand Africa 100 ranking Africa’s most valuable, valued and admired brands.

Only 23 of the top 100 brands are African.

MTN took the top spot from Coca-Cola to become Africa’s Most Admired Brand in 2015.