Outgoing MTN Group CEO, Mr. Phuthuma Nhleko, has debunked persistent rumours that the telecommunications operator plans to relocate its head office to the Middle East, saying its domicile will always be South Africa.
This is as Mr. Nhleko is looking forward to what he calls a “much slower pace” when he steps down at the end of this month. He has led MTN for the past nine years.
Market talk has persisted in the past two years that MTN wants to move its headquarters to Dubai, where it already has a large office of network engineering, human resources personnel and other support staff serving countries in the region.
According to Agency report, MTN operates networks in countries such as Iran, Syria and Afghanistan, which can be more easily served from an office located in the Middle East.
The group’s decision to create a new structure, with MTN International holding its interests outside South Africa, has prompted some market commentators to question whether it has plans to relocate the group’s main office to Dubai.
Nhleko describes the rumours as nonsense, adding: “This is not about domicile, that is not even a debate.”
He said it is about placing staff in regions from where it makes sense to serve the 21 territories in Africa and the Middle East in which the group operates.
MTN International, which is still being formed, will “probably” be based in South Africa, Nhleko says. It will report into MTN Group, with the group’s senior management ultimately calling the shots.
“MTN Group, as far as we are concerned, will forever reside in South Africa. And we will expand throughout the world from here,” he says.
He said creating a new international structure is important because it “caters for the broadness” of the group.
“Also, you have to ensure you continue growing those operations and get more. You can’t ignore the 75 per cent growing part of your body as it continues to spread. You need to ensure your balance sheet is efficient, your funds are in the right places, and you need to optimise your capital structure,” he said.
MTN will remain listed in South Africa, though a dual listing on an international bourse is an option, Nhleko says. “We must always find ways of unlocking value for shareholders. One way of doing that may involve MTN International being listed itself, but we are not saying that is what we want to do. It is one of the permutations the board will consider.”
Meanwhile, Nhleko plans to step up his focus on Worldwide African Investment Holdings, which has interests in the resources and energy sectors where he owns an effective 20 per cent of petroleum company, Engen.
Nhleko says Worldwide has been “treading water” in the past 10 years while he has focused his energies on MTN. New investments may be on the cards for the company, but he emphasizes it won’t invest in the telecommunications sector as he has signed a three-year restraint-of-trade agreement with MTN which precludes him from operating in the space.
“I need to go back to the drawing board. It’s early days. I need to wind down at MTN, then really apply my mind to how I can use that platform,” he says.
In addition to the renewed focus on Worldwide, Nhleko has been appointed as a non-executive director on the boards of BP and Anglo American, both London-listed companies. He’s also staying on at MTN Group as non-executive deputy chairman and non-executive chairman of MTN International.
“These appointments are sufficient to take a bit of my time, especially since boards can be a bit involved these days. I’m looking forward to a much slower pace and I’m sure I’ll get involved in community service work.”
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