Purchase of minority stake in MTN Nigeria raises corporate governance concerns

South African holding company Shanduka Group has acquired a stake in MTN Group’s Nigeria business, its largest investment so far in a push to expand across Africa.

Shanduka Group bought an unspecified minority stake in MTN Nigeria for US$335 million to become the third largest shareholder in the cellco, the country’s largest mobile operator with an estimated market share of 48 per cent. Shanduka made the purchase of its stake from an undisclosed private-equity firm.

MTN Nigeria is 78.8 per cent owned by MTN Group, and its second largest shareholder is a group of Nigerian partners.

Corporate governance issues have since been raised over the deal given that MTN Group non-executive chairman, Cyril Ramaphosa, is also the founder and chairman of Shanduka Group. To further exacerbate matters, MTN Group CEO, Sifiso Dabengwa is reportedly in a personal relationship with Shanduka Group CEO Phuti Mahanyele.