MTN lists BEE scheme on the JSE despite looming fine

By Staff Writer
Despite MTN recently being hit by a $5.2 billion (about R71 billion) fine in Nigeria, the mobile network giant has decided to go ahead in debuting its black empowerment scheme, Zakhele, on the Johannesburg Stock Exchange (JSE) this week.

Zakhele, launched in 2010, aims to assist previously disadvantaged South African citizens to invest in the mobile network.

MTN reportedly came out in September saying that the ‘market capitalisation’ for the scheme had grown to a sum of R9 billion.

“MTN Zakhele decided to list on the JSE as there was a change in the Financial Services Board (FSB) policy in relation to the regulation of all providers of over-the-counter (OTC) share trading platforms for facilitating trading in own shares. As a result of regulatory policy changes implemented by the FSB in 2014, it will no longer be possible to continue buying and selling MTN Zakhele Shares on the OTC trading platform without MTN Zakhele applying for an exchange licence.

Ultimately, the listing will now provide shareholders with regulatory certainty for trading their MTN Zakhele shares.  The previous OTC trading platform closed on 26 October,” said Sindi Mabaso-Koyana, chairperson of MTN Zakhele.

This past week, however, saw market commentators speculating about whether or not it would be wise for the mobile network to go ahead with the listing after the confirmation that they were being fined $5.2 billion.

The fine reportedly stemming from the company’s failure “to disconnect five million unregistered SIM cards in a timely manner.”

When asked about the concern that the news of the fine will negatively affect the listing, Mabaso Koyana said: “It is a migration from the previous OTC platform to the JSE. We are not raising capital, we are providing a necessary trading platform for MTN Zakhele shareholders and potential investors.

“We have referred shareholders to the cautionary announcement released by MTN Group Limited on 2 November 2015 and, as MTN Zakhele’s only material asset consists of shares in MTN, MTN Zakhele shareholders should consider the cautionary announcement, as well as subsequent announcements released by MTN relating thereto, when trading in MTN Zakhele Shares.”

Last night the mobile network came out denying reports that they had reached a resolution with the Nigerian regulators.

Chris Maroleng, Group Executive for Corporate Affairs, said: “MTN cautions against reports purporting that the company has agreed a resolution with the Nigeria Communications Commission (NCC) on the fine. This is false, as no resolution has been reached yet. MTN continues to engage with the authorities in Nigeria on this matter.

All stakeholders are reminded that MTN will inform them of any material developments in our engagements with Nigerian authorities via the Stock Exchange News Service of the JSE Limited (SENS). Shareholders have also been asked to exercise caution when reacting to information that has not been released by the company.”

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