Johannesburg, South Africa – A deepening crisis is unfolding at MTN, Africa’s largest mobile network operator, as internal conflicts over leadership threaten to destabilize the company.
The turmoil centers around CEO Ralph Mupita, with reports of senior executives considering mass resignations due to dissatisfaction with his leadership style and allegations of favoritism.
At the core of the controversy is Mupita’s close relationship with a top female executive within the company, which has raised concerns among other C-suite leaders. Some executives allege that Mupita has been attempting to shift key responsibilities away from them and towards this executive, sparking accusations of improper conduct.
The situation has become so serious that the matter was reportedly discussed at a board meeting held in China earlier this year. The issue has also led to an anonymous whistleblower complaint, prompting MTN’s board to engage a law firm to investigate the claims, including allegations that a culture of fear has taken hold within the company.
This internal strife comes at a time when MTN is grappling with significant financial challenges. The company’s profits plummeted by 80% in the 2023 financial year, with a reported loss of nearly R10 billion in the first half of the year. These financial woes have only added fuel to the fire, with some investors and senior managers reportedly questioning Mupita’s leadership.
In response to inquiries, MTN acknowledged the investigation but did not provide specific details. “The group board has initiated a verification exercise in response to complaints received against certain senior executives. Once the process is concluded, the board will deliberate,” the company said in a statement.
Insiders have revealed that tensions have escalated within the executive committee, with some leaders resisting attempts to centralize power under the female executive. It has been reported that efforts were made to transfer some of the responsibilities of Charles Molapisi, the CEO of MTN South Africa, to her, leading to significant pushback from other senior leaders.
“There is a culture that is causing underperformance,” said a former MTN executive who wished to remain anonymous. “There is leadership infighting, and the group executive committee has been weakened. A few outliers are pushing back against Mupita, but others are too scared to speak up for fear of being sidelined.”
The growing dissatisfaction has reportedly caught the attention of the board, which is under pressure to address the concerns before Mupita’s contract expires in a year. However, the board is said to be hesitant to discuss the renewal of his contract, with a scheduled meeting of its nomination committee postponed for three months, potentially to allow time for the ongoing investigation.
There are also whispers that some of MTN’s largest investors are working together to oust Mupita, with some even targeting board chair Mcebisi Jonas. However, these claims have not been independently verified.
Mupita, who joined MTN as CFO in April 2017 and became CEO in September 2020, has faced increasing scrutiny over the company’s financial performance. Despite the poor results, Mupita has defended his leadership, attributing the downturn to external factors such as the depreciation of the Nigerian naira and the ongoing conflict in Sudan.
In a recent media briefing, Mupita argued that the company’s underlying business remains strong despite these challenges. He pointed to improvements in MTN’s balance sheet, noting that the company has significantly reduced its dollar-denominated debt since he took over.
However, critics within the company argue that the problems are more fundamental and cannot be blamed solely on external factors. They point to delays in executing key strategies, such as the slow rollout of the Mastercard partnership, as evidence of deeper issues within the company.
As the board’s investigation continues, the future of MTN’s leadership remains uncertain, with the potential for significant changes if the current crisis is not resolved.
Source: Sunday Times