Phuthuma Nhleko spent more than a decade building MTN Group into Africa’s biggest wireless operator by rushing into markets few rivals would touch, from Syria to Afghanistan to South Sudan. Now his appetite for risk has come back to haunt him, and shareholders are calling for new leadership with a different approach.

The drawbacks of the aggressive style became apparent in October, when Nigeria slapped the company with a $5.2bn fine – an unheard-of amount, equal to double the cash on MTN’s books. Chairman Nhleko, who had stepped aside as CEO, returned to sort out the mess and line up a new CEO, giving himself six months.

With that deadline past and no signs of progress, investors will be looking for answers at the company’s annual meeting on Wednesday.

Nigeria said last week negotiations on the now-$3.9bn fine were on hold. The stock has lost almost one-third of its value, and short-seller Jim Chanos says the next move is down.

The missteps have rattled investors such as Nick Crail, a money manager at Ashburton Investments. He has concluded that MTN needs to bring in an outsider to run the company and make changes to the board to tame its freewheeling corporate culture. By doing so, Nhleko could show that MTN has a game plan that it can execute – essentially, that it is growing up.

“There is a perceived lack in the credibility of the MTN management team at the moment, and someone massively different, with a background in telecoms and a good execution track record, would be welcomed.”

MTN did not immediately make Nhleko available for comment.

The Nigerian regulator fined MTN for moving too slowly to disconnect customers unregistered in the country, which is battling an Islamist insurgency. MTN engaged former US attorney-general Eric Holder, a partner at law firm Covington & Burling, to challenge the penalty.

A resolution may still be far off. Nigeria had suspended talks on the fine while the country’s House of Representatives completed an investigation into the size of the penalty and how it was delivered, a spokesman for the ministry of communications said on Friday. MTN spokesman Chris Maroleng said on Monday, the firm “cautions shareholders not to make decisions based on media reports.”

Failing to heed the regulator “smacks of a cavalier attitude,” says Simon Brown, a trader at South African investment adviser JustOneLap. “The company is now paying the price.”

Problems sprouted up elsewhere as well. Cameroon’s regulator identified the company in January as one of three wireless operators that evaded taxes, which MTN denies. In Uganda, it was also ordered to disconnect subscribers. MTN South Sudan said last month it would cut more than half its workforce and cancel expansion plans in the war-torn country.

“It’s clear that MTN did not do a good job in the past in controlling risk,” says Erhan Gurses, a telecommunications analyst for Bloomberg Intelligence. “The company will definitely need to be stricter in terms of corporate governance.”

The share slide has erased about R118bn from MTN’s market capitalisation since October, putting it behind Vodacom Group as Africa’s most valuable phone operator.

Some investors see more trouble ahead. Chanos, the founder and managing partner of Kynikos Associates, says he is betting MTN will fall further, as weak commodity prices curb demand in some of its biggest markets. Those include Nigeria and SA, where the central bank on Thursday cut its growth forecast for the year to 0.6%.

Nhleko, an Ohio state-educated engineering graduate, transformed MTN from a small South African wireless carrier into a regional giant, with operations in 22 countries across Africa and the Middle East. He also became one of the wealthiest black South Africans, with assets of $142m, the Sunday Times newspaper reported in June 2015.

MTN is the industry leader in 15 countries, including Nigeria, its biggest market with about 61-million of its 229-million customers.

Nhleko, who served almost nine years as CEO before stepping down in 2011, returned to the helm as executive chairman after CEO Sifiso Dabengwa quit in the wake of the fine.

Among potential contenders for the top job, Marco Patuano, who resigned as Telecom Italia head in March, says he is “not a candidate” for the post.

With investors pushing for an outsider, the chances may have dimmed for internal candidates such as MTN SA CEO Mteto Nyati, or Nigeria CEO Ferdi Moolman.

Nhleko has already reorganised to improve compliance, separating the company into three defined regions, with all the vice-presidents reporting directly to the CEO.

•Text courtesy of Bloomberg.

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