The Nigerian Securities and Exchange Commission, (SEC) has been handed over a 14-day ultimatum to delist some members of the newly constituted MTN board or face legal action.
The new MTN Board of Directors who were former public officials are believed to have been picked to offer the South African communications concern undue advantage in Nigeria’s political and economic environment.
The protesting anti-corruption group said their retention violates the Nigerian constitution and undermines best practices in corporate governance.
In a petition written by Human and Environmental Development Agenda (HEDA Resource Centre) and sent to the Acting Director General of SEC, the group called for the immediate rejection of the former public office holders listed as new board members of the South African owner communication concern.
HEDA in the petition signed by its Chairman, Olanrewaju Suraju, said it has been monitoring reports that former MTN local boss, Pascal Dozie’s, exit as MTN Nigeria’s Chairman saw a rash of new Directors who are anxious to offer strong local pull with Regulatory Commissions and the Presidency.
The anti-corruption group said there were reports that MTN Nigeria’s recent Board members’ selection represents an economic intrigue aimed at insulating the MTN from adverse local political action given its recent history with the regulatory agency, the Nigerian Communications Commission, NCC, and the office of the Attorney General of the Federation, AGF.
Earlier media reports had listed its designate Chairman, Mr. Ernest Ndukwe, an engineer, who was one-time Executive Vice Chairman of the Nigerian Communications Commission with strong speculations that his presence on the Board will afford the company the benefit of having a regulatory insider available to intervene on its behalf in troubled times.
HEDA lists other figures in the board that may offer undue priviledge to MTN.
The group rejected Mr. Muhammad Ahmed, former Chairman of the Technical Committee of the Nigerian Code on Corporate Governance and it was alleged that he will bring to the Board technical guidance and public credibility on issues relating to the company’s internal control processes and overall governance standards.
In addition, it said reports indicate that Muhammed Ahmed also Chairs the Boards of two local banks and is also on the interim Board of International Energy Insurance Company (IEI).
Suraju said it was perceived that he has been brought on the Board to provide a sound Board for governance and protect the company from the intrusion of third-party investigators.
The group stated “it was equally reported that the presence of Mr. Andrew Alli on the MTN Nigeria’s Board as a non-Executive Director provides MTNN with the technical expertise of a seasoned banker and the extensive local contacts of a long-standing local Boardroom Executive. As conveyed in the report, Alli’s nomination also seems to give the outgoing Chairman, Dr. Dozie, a backdoor channel to the Board as Alli is known to be a long-time associate of Pascal Dozie and was at one time speculated to have been head-hunted as a possible managing director of Pascal Dozie’s now defunct, Diamond Bank. Alli, a chartered accountant, has extensive investment banking experience and was at one time on the Board of MTNN representing the International Finance Corporation (IFC).”
HEDA expressed worry that Alli may likely be Dr. Dozie’s principal liaison with the MTNN C- suite.
The group also questioned another person on the board, Mrs. Omobola Johnson, a former Minister for Communication between 2011 and 2015 who is believed will reinforce the company’s efforts at ring fencing its local Nigerian operations from potential institutional and political storms.
According to HEDA, Mrs. Ifueko Okauru who was a former Executive Chairman of the Federal Inland Revenue Services (FIRS) and remains a highly connected local authority on taxation also should not have been listed in the MTN board.
HEDA said with the MTN board members, transparency, neutrality and accountability will be compromised.
The group noted that Mrs. Ifueko Okauru was a one time Chairman of Federal Inland Revenue Service (FIRS) when the Nigeria Labour Congress demanded Economic and Financial Crimes Commission, (EFCC) to probe the operations of MTN Nigeria following allegations of illicit financial flow and tax evasion as reported by the Nigerian media.
It noted that the allegations were not addressed by Mrs. Ifueko Okauru as Chairman of FIRS, exposing the country to losses of funds badly needed by the country for developmental purposes.
“As relayed above, Mrs. Okauru was Chairman of FIRS when the allegations of MTN Nigeria’s tax evasion of over $2 billion relating to import duties, VAT, withholding tax on foreign import/payments were revealed and despite this it was reported that tranches of transfers were discovered to have been made to companies in Dubai and Mauritius as reported by Satellite Times on the 8th October, 2018 and these allegations under the nose of the former Chairman was consequent upon the failure of the FIRS to undertake diligent and effective supervision and no record of investigations to confirm the authenticity or otherwise while in office.”
HEDA stated further “It was reported that major mobile companies in Nigeria were fined by the NCC for failure to adhere to the law and were given a week to de-activate unregistered lines. It was reported that while other mobile firms complied, MTN flouted the regulator’s instructions, leaving 5.2 million unregistered users on its network and the fine was due on November 17, 2015, but MTN managed to secure a cover up and delayed fines until a new management and government came into office. It is a complete show of irony that Mr. Ernest Ndukwe who was the Vice Chairman of Nigerian Communications Commission during the MTN infractions, the regulatory body solely responsible for the business activities of telecommunications and Mrs. Mobolaji Johnson as the Communication Minister at the time of this infractions will be selected as the designate chairman and Board Member respectively by the telecommunication company”.
The group regretted that the NCC and Communication Ministry under the two public officers watched the same telecommunication company flout rules without actions against the company until a change in government and NCC management .
“It is our firm believe that these persons who were once public office holders who ought to have acted against some activities and alleged infractions of this company but failed in their responsibilities and capacities are now being compensated with appointments into the board. This only goes to suggest that the organisation has compensated these officers for their previous compromise of their oath of offices and would further indulge in cutting corners with the confidence of the influence of these persons in their former respective capacities which we believe will amount to evading sanctions and on the whole rub the nations of its sanctity”
HEDA said that according to Rule 601 of the Securities And Exchange Commission Rules And Regulations, 2013, which empowers the Commission to impose sanctions on registered companies, particularly Rule 601(5) and states that the removal of executive officers of a capital market operator, securities exchange, capital trade point and other SROs as one of the sanctions that can be imposed by the Commission.
“We hereby demand that this provision be enforced against MTN Nigeria Communications Plc with respect to the newly constituted board, based on the above relayed and the eventually undue privileges peddling that this may result to” said HEDA.
The group added “in the light of the above, we hereby demand that the Commission rejects with immediate effect the nomination of the above stated persons (Dr. Ernest Ndukwe, Mrs. Mobolaji Johnson, Mrs. Ifueko Omoigui Okauru and Mr. Muhamad Ahmed) as members of the Board of the MTN Nigeria Communications Plc. within 14 days of the receipt of this letter or in the event that this is not done within the stated period, we shall without a further recourse to you proceed to a court of competent jurisdiction to demand the performance of this request”
