Few days ago two lawyers, who are subscribers to MTN, have filed a legal suit against the Nigerian Communications Commission (NCC) as first respondent and MTN Nigeria as second respondent, over the N1.04 trillion fine imposed on MTN by NCC on SIM card deactivation.
The lawyers, Mr. Oluyinka Oyeniji and Chief Deolu Ogunbanjo, both incorporated trustees of National Association of Telecoms Subscribers (NATCOM), have challenged NCC at the Federal High Court, sitting in Lagos, praying the court to stop NCC from further imposing fine on MTN. They also want the court to compel NCC to account for all the monies it collected from telecoms operators in the past as fines, and to pay such monies to subscribers as compensation for poor service quality they had suffered from in the past.
According to the court document, both lawyers, who are applicants one and two respectively in the court case, are calling for an order of perpetual injunction, restraining the first respondent (NCC) from further imposing or exerting any fine in respect of registration of telephone subscribers on the second respondent (MTN).
They called for an order, mandating the first respondent to commission, establish and conduct monthly updates on the central database and to conduct rigorous campaign for applicants and other telephone subscribers to update their particulars with the respondents.
They equally called for an order, mandating the respondents to publish newspaper apologies to the applicants and other telephone subscribers for the lack of establishment, maintenance and conducting updates on the central database.
In a sworn affidavit, the lawyers mandated NCC to account for all the fines it had imposed on telecoms operators and pay applicants as well as other telephone subscribers as compensation, and to continue to pay fines exerted and imposed upon conviction as compensation to applicants and other telephone subscribers.
Meanwhile speaking in johannesburg few days ago, south Africa’s Deputy President Cyril Ramaphosa has urged Africa’s biggest mobile-phone company, the MTN Group Ltd., to follow the rules in countries where they operate.
This followed a fine of $5.2 billion imposed on MTN by telecoms industry regulator, the Nigerian Communications Commission (NCC), for failing to disconnect customers with unregistered phone cards.
NCC gave MTN until November 16 to pay the fine, which relates to the timing of the disconnection of 5.1 million subscribers and is based on a charge of N200,000 ($1,005) for each unregistered customer.
Nigeria is the Johannesburg-based MTN’s biggest market with 62 million clients as of September.
The company’s shares have slumped 14 per cent since October 26, when the fine was imposed.
Ramaphosa, in his speech to lawmakers in cape town said the government would be taking note of what “is happening with a view of seeing how the company involved responds and reacts” to its challenges.
“We would like our companies to comply with the laws and regulations of countries where they operate, without violating them.
“It does seem like in the case of Nigeria, there were issues, and those issues need to be addressed.
“If this fine is indeed imposed as it is, it is going to impact on South Africa as well, as our revenue fortunes from a taxation point of view are going to be lower,” he said.
Agency reports indicated that comments by Ramaphosa, a former chairman of MTN, suggested that South African authorities might leave MTN to face its problem as it seeks to have the penalty reduced.
South African authorities might also be reluctant to confront their Nigerian counterparts following a series of diplomatic spats that have soured relations between the Africa’s two biggest economies.
The most recent occurred in April, when Nigeria’s government allegedly ordered its two most senior diplomats in South Africa to return home for consultations following a wave of attacks against immigrants, including Nigerians, in Johannesburg and Durban.
“South Africa does not have a track record of defending its national company champions internationally,” Nic Borain, a political analyst, who advises BNP Paribas Cadiz Securities, said by phone.
“On the face of it, this fine seems seriously over the top. Ramaphosa’s words about the issue seem weak as they veer too much on the side of caution,” he added.
South Africa’s telecommunication and finance ministries didn’t respond to agency’s calls and e-mails seeking comment.
Lawmakers plan to summon MTN officials to explain why the company was fined, Nkhensani Kubayi, chairwoman of Parliament’s telecommunications committee, said by phone from Cape Town.
The panel will also ask the South African industry regulator to determine whether MTN is compliant with local rules, with hearings likely to take place next year, she said.
In addition MTN Group President and Chief Executive Officer, Sifiso Dabengwa has resigned this morning over the N1.04tn fine imposed on MTN Nigeria by the country’s regulatory body – the Nigerian Communications Commission.
A credible source at the MTN Group office told newsmen that the company subsequently appointed Phuthuma Nhleko as Executive Chairman in a temporary capacity.
He said Nhleko, the current Non-executive Chairman, has agreed to act as Executive Chairman for a maximum period of six months while the company identifies a successor for Dabengwa.
A copy of Dabengwa’s resignation letter was made available to correspondents and it read in parts-“Due to the most unfortunate prevailing circumstances occurring at MTN Nigeria, I, in the interest of the company and its shareholders, have tendered my resignation with immediate effect.”
Officials at MTN said Nhleko was no stranger to the business as he served as non-executive director and chairman of MTN from July 2001 until June 2002 and thereafter as an executive director, Group president and CEO until March 2011. He has subsequently chaired the Group in a non-executive capacity for the past two and a half years (since May 29, 2013).
“I will assume responsibility as Executive Chairman for the next six months as I proactively deal with the Nigerian regulator and will continue to work with them in addressing the issues around unregistered subscribers as a matter of urgency,” Nhleko said in his acceptance letter.
Mr. Alan van Biljon would continue to serve as the Lead Independent Director on the MTN board of directors (MTN Board), while Nhleko takes over executive responsibility.
“Together with the MTN Board, my second priority will be to find an appropriate Chief Executive Officer to take MTN forward. I will then revert to my Non-executive Chairman role,” Nhleko added.
”Stakeholders are reminded that MTN will continue to inform them of any material engagements with the Nigerian authorities via the Stock Exchange News Service of the JSE Limited.
“Shareholders are advised to continue to exercise caution when dealing in the company’s securities until a further announcement is made,” the source added.
The Brand radio blog deeply sympathizes with MTN Nigeria-The biggest advertising spender.
Compiled, edited and posted by: Jimmyadesanya (Facebook.com/LinkedIn)