Black investors turn activist at MTN

Executives quizzed on BEE, bonuses, corruption claim

MTN shareholders turned up the heat on the company’s leadership over salaries, bonuses and striking employees at the annual general meeting (AGM) on Wednesday.

However, it was not large institutional shareholders taking MTN to task but a handful of black shareholders, some of whom had bought into the broad-based black economic empowerment (BEE) scheme MTN Zakhele, launched in 2010.

One, Sello Phakoe, queried MTN’s policy on procuring from black small and medium-sized enterprises (SMEs), saying “procurement for black SMEs is virtually nonexistent”.

“What is MTN doing in line with the new BEE codes considering that the vast majority of our income comes from the black population?” he asked.

CEO Sifiso Dabengwa assured him there was a procurement policy although he did not have the figures at hand.

Shareholder Bontshiwe Mothopeng said after the meeting: “As black shareholders, it is our responsibility to do shareholder activism, buy shares in all major companies and transform them so that management knows it’s not a tick in the box to do enterprise development and empowerment, but it’s what shareholders want.”

It is clear that MTN is dealing with a new breed of shareholder. They questioned chairman Phuthuma Nhleko about the 2011 allegations by Turkcell that MTN obtained its licence in Iran by paying bribes.

Nhleko, however, maintained that those claims were simply spurious. Nhleko was CEO at the time of MTN’s expansion into Iran nine years ago.

One investor said Dabengwa’s remuneration “of R20-million was concerning against the

TARGET: CEO Sifiso Dabengwa backdrop of” the strike that has crippled MTN’s call centres.

Members of the Communication Workers’ Union are demanding a salary increase of 8%, down from 10%, and a bonus of 12%, down from a previous 16%.

Dabengwa said: “The strike is a direct result of [MTN] South Africa not meeting its performance targets. It has happened to eight operations out of 22.”

He said rescinding bonuses was nothing new. If companies in the group did not meet targets, bonuses were not paid.

Alan Harper, the chairman of the remuneration committee, defended MTN’s pay policy, saying it was designed to protect shareholders’ interests.

Last year, Dabengwa was paid R28.1-million, including a bonus of R13.3-million. At the AGM, the remuneration policy was overwhelmingly approved.

One elderly shareholder tried to block Dabengwa from leaving, wanting to know how much his own “bonus” was. In the end, staff realised he was seeking to claim his dividend.

During the AGM, police stood guard outside MTN’s offices.

On Friday the strike turned violent when union members burned tyres at the entrance to the MTN head office in Fairland, Johannesburg.

Clyde Mervin, the president of the Communication Workers Union, said police had fired rubber bullets at protesters and injured three women, who were taken to hospital. One man was arrested for photographing the police during the shooting.

MTN spokesman Chris Maroleng said it was not true that rubber bullets had been fired, saying instead that striking workers had lit fireworks.