MTN Group Ltd (ADR)(OTCMKTS:MTNOY) was a massive decliner during Thursday’s trading session plummeting by close to 5% on relative high volumes, which were 1.1 times the daily average. The stock has been trending lower ever since it broke below the important support level at $11.92. Medbox currently trades below all daily moving averages, which is a negative. The indicator measuring relative strength provided a fresh sell signal indicative of the strong selling interest. The oscillator for momentum is showing no signs of strong bullish reversal. The stock is currently trading near its 52-week low, which is a bearish signal.
After repetitive requests made by MTN Group Ltd (ADR)(OTCMKTS:MTNOY), Nigerian Communications Commission or NCC has decided to reduce the overall fine imposed on the company by $3.4 billion.
As per the reports, initially NCC had imposed a total of One Trillion, Forty Billion Naira (N1,040,000,000,000) fine, but after this revision, the fine has come down to N674 Billion Naira. The last date to pay this fine is December 31, 2015.
Insights of The Matter
The fine relates to the step that was taken in August and September, under which the company failed to deactivate about 5.2 million MTN Nigeria SIM cards, which were not registered with the government. It could have been a threat to national security, which is why Nigeria imposed a penalty when the company couldn’t meet the deadlines to deactivate these SIM cards.
MTN doesn’t want to take any risk at this moment; hence, it’s paying heed to this reply by NCC in the best possible manner. Reports claim that Phuthuma Nhleko, Executive Chairman, MTN Group, is likely to get in touch with Nigerian authorities as soon as possible to discuss the consequences before taking any further action.
This decision may have a huge impact on the company’s subscribers, investors, and other key account holders; therefore, the senior management team doesn’t want to take any risk at this moment. Details about the probable action from the company haven’t been made public yet. Until the final decision comes, shareholders are requested to pay due attention and take precautions before engaging in any trading activity.
Resignation of MTN CEO
Earlier, company’s then CEO Sifiso Dabengway had resigned from his post immediately after the company received a notice from Nigerian government regarding $5.2 billion fine. In his absence, Nhleko has been serving as the interim CEO of the company. He was the one who got in touch with the Nigerian authorities and requested them to bring down the penalty amount.