Africa focused mobile network operator MTN has rejected media reports suggesting that its largest shareholder, the Public Investment Corp. (PIC), is pushing for changes to the MTN board, most notably the replacement of Chairman Phuthuma Nhleko.

MTN cited a Bloomberg report which quoted 'people familiar with the matter' as saying that PIC built a 26% stake in MTN by late November 2018 and used this to call for Nhleko's replacement and "a board reorganisation".

The MTN Group issued a statement in response to what it called "unsubstantiated rumours and inaccuracies".

An excerpt from the statement reads: "MTN regularly engages with its shareholders where we have robust, constructive, open and transparent discussions about the business. A key part of that engagement is the governance roadshow with investors that, over the last two years, has been held ahead of the AGM. During these roadshows MTN Group engages with the PIC and other major investors on matters of governance, strategy and financial performance."

The operator stated further that contrary to what the story alleges, "the PIC requested that the board consider extending Phuthuma Nhleko's term longer than he had originally intended to remain Chairman. MTN Group applied its mind on the request, and considering other issues around the board evolution, asked Phuthuma Nhleko to stay until the 15 December 2019 to ensure an orderly hand-over to the Chairman designate, Mcebisi Jonas."

On 3 May ITWeb reported that MTN announced changes to its board and the establishment of an international advisory board (IAB).

The company confirmed Nhleko's departure on 15 December and the appointment of Jonas as Group Chairman effective 15 December, as part of a series of changes that will take effect over the next 12 months.

It added that Alan Harper, Jeff van Rooyen and Koosum Kaylan will step down from the board on 15 December "after an orderly transition and handover to incoming directors."

Peter Mageza and Dawn Marole will step down from the board effective 30 April 2020.

MTN's latest statement continues: "The MTN board evolution and the setting up of the International Advisory Board (IAB) were communicated to shareholders and broader stakeholders on 3 May 2019 following a proposal by the nominations committee of the board and approved by the board as standard good governance. These changes were discussed with major shareholders during this year's governance roadshow ahead of the 2019 AGM, with the PIC supportive of the changes."

"The board evolution and rotation of non-executive directors was done in line with the King IV Guidelines and strengthens expertise and perspectives to ensure that the business has the appropriate skills and experience as the business executes on its strategy and ambition to be the leading digital operator in Africa and the Middle East. The process of the board evolution has been ongoing and was commented on in the 2017 Integrated Report released last year."

In its announcement of the IAB (to function from 1 July 2019), MTN explained that its purpose is to counsel, guide and support the company in fulfilling its objective "to be one of the premier African corporations with a global footprint in telecommunications."

The IAB is non-statutory and does not have fiduciary responsibility, according to MTN, but will play an important role in ensuring the board is guided, ITWeb reports.

MTN added, "...the primary purpose of the IAB is to provide general global and/or sector specific perspectives that may enrich the perspectives of the operating company's Board as it strives to contribute to certain areas of development in the countries in which it operates. The construct of an IAB is one that is adopted by a number of global multinationals that operate in varied and multiple jurisdictions across the world. While this is not prevalent in South African domiciled companies, such Boards advise a number of global companies quoted on major global bourses. The IAB was conceptualised by the MTN Board before the PIC increased its shareholding in MTN."