New MTN Boss, An Outsider And Former Banker, Replaces Dabengwa
South African mobile phone operator MTN Group has chosen a new CEO who brings a wealth of banking experience needed to revise MTN’s strategy, particularly in the area of convergence between mobile telephony and financial services, the company said Monday in a statement, BusinessDayLive reported.
Rob Shuter, a South African with a background in accounting and risk management, will replace Sifiso Dabengwa, who resigned in November after Nigeria imposed a $5.2 billion fine on MTN, Africa’s largest mobile phone operator. Read more about Dabengwa in this AFKInsider report.
An MTN outsider, Shuter is CEO of Vodafone Europe. He was named MTN CEO less than two weeks after MTN and Nigeria agreed to settle the fine for $1.7 billion, Reuters reported.
Shuter has also served as head of investment banking at Standard Bank and head of retail banking at Nedbank. He became CEO of Vodafone Netherlands in April 2012. In October 2015, his role was expanded to include the other European countries.
MTN is trying to improve corporate governance while looking for new ways to make money as competition hits profits in its main markets, according to Reuters.
Concerned that SIM cards were being used by Islamist militant group Boko Haram, Nigerian authorities cracked down on unregistered cards. Nigeria imposed the massive and unprecedented fine after MTN missed a deadline to cut off users with unregistered SIM cards.
“MTN has weathered a rather difficult storm and will continue to review its governance and management operating structure,” said acting Executive Chairman Phuthuma Nhleko in a statement after the announcement of Shuter’s appointment.
MTN has also had regulatory problems in other countries where it operates, including Uganda, Cameroon, Iran and Syria, Reuters reported.
Founded with the government’s help after the end of apartheid in 1994, MTN was considered one of South Africa’s biggest corporate success stories.
The company counted South Africa’s Deputy President Cyril Ramaphosa as a shareholder and board member, at least until 2013.
In 2013, Turkish rival Turkcell tried without success to sue MTN for $4.2 billion, alleging corruption and bribery that caused it to lose an operating licence in Iran.
News of Shuter’s appointment caused MTN shares to rise.
“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 Investments, a Cape Town-based asset management firm that holds shares in MTN.
Other MTN appointments
MTN plans to appoint a new vice president for mergers and acquisitions and strategy effective Oct. 1 as part of the group’s aim to develop new revenue streams, News24 reported.
“The appointee has a wealth of banking experience … His name will be announced before June 30,” MTN said.
Nhleko was appointed interim chairman following Dabengwa’s resignation with an eye to renegotiating the fine in Nigeria, according to Reuters. He will revert to non-executive chairman when Shuter starts his new job by July 2017. MTN said Nhleko would remain MTN chairman for the next two-and-a-half years, then he plans to step down.
The company said it is refreshing its board with a view to improving its risk and governance profile.
It announced the appointment of Godfrey Motsa as vice president for MTN South and East Africa. Motsa is head of consumer business at Vodacom.
Other MTN appointments include Paul Hanratty, an Old Mutual executive; Stan Miller, who was part of the M-Net founding management team; and Nkululeko Sowazi, a South African businessperson. At MTN South Africa, four new board members were announced.