The decision by Phuthuma Nhleko to step down as MTN CEO is “bad news” for the JSE-listed cellphone group, says investment expert David Shapiro of Sasfin.
“What always worries me is that these chaps only resign when the best is over,” he says.
“Maybe he’s said, ‘I’ve done as well as I could have out of this,’ and he sees problems ahead. Why tarnish his reputation? So he hands it over to someone else.”
MTN said on Monday that Nhleko (pictured) would not seek to have his long-term contract renewed. The contract expires in June. But Nhleko has agreed to stay on until March 2011 — at the latest — to ensure a smooth handover to his successor, who must still be chosen by the board.
Though MTN’s share price was trading up 0,6% in mid-morning trade on Monday, Shapiro believes this is driven by momentum, and not the news of Nhleko’s resignation.
“I don’t think the market has digested this at all,” he says. “I think it’s bad news. Why is he resigning now? I think it suggests we’ve seen the best from this company, so I see this as a negative thing.”
Shapiro says the telecommunications sector generally is facing a range of challenges. “This is an industry with a lot of issues,” he says. “The free and easy money is over.”
Nhleko’s planned departure follows the resignation last year of MTN’s group financial director, Rob Nisbet. — Duncan McLeod, TechCentral