Mobile operator MTN yesterday aired its corporate governance fight with IHS Holdings, which the mobile operator partly owns, saying it has breached a shareholder agreement and called for an extraordinary general meeting.
MTN, through its subsidiary Mobile Telephone Networks, holds approximately 85.2 million shares or a 26% economic stake and controls 20% of the voting rights. However, the group does not have board representation in IHS currently.
MTN said in a statement yesterday that IHS had “wilfully breached” the shareholders’ agreement and Articles by failing to notify its shareholders about a MTN corporate governance proposal and had denied its shareholders the opportunity to vote on it at the IHS AGM.
In light of this, the mobile operator has now requested the IHS board to call an extraordinary general meeting of the IHS shareholders in order to consider the above-mentioned proposal, and any other shareholder proposals relating to governance, to which the group awaits a response.
“Beyond this, MTN is currently evaluating all its options with the intention of fully enforcing the Shareholders’ Agreement and Articles,”it said.
The mobile giant explained how the dispute arose:
In view of IHS’s consistent share price under-performance since listing, MTN had not been able to dispose of the non-voting proportion of its shares and remained unable to vote all of its shares, the group said yesterday.
Earlier this month Simply Wall St, a share analysis platform, said IHS Holding’s share price has slid 34% over 12 months.
“That falls noticeably short of the market return of around 3.5%. Because IHS Holding hasn't been listed for many years, the market is still learning about how the business performs. More recently, the share price has dropped a further 13% in a month” it said.
MTN explained that it had submitted a governance proposal that was to be considered by all shareholders to the New York-listed IHS before its annual general meeting (AGM), which was held last week.
The proposal was intended to protect important shareholder rights and to better align IHS’s corporate governance with other publicly traded companies.
MTN also had sought to convert its non-voting shares into voting ones, and that motion was denied.
MTN has held the IHS shares since prior to IHS’s initial public offer (IPO) on the New York Stock Exchange in October 2021.
MTN said it had been engaged in discussions with IHS regarding corporate governance matters since prior to its IPO. These discussions included the provisions of the shareholders’ agreement that was in place between IHS and its shareholders prior to the IPO; where an amended shareholders’ agreement was implemented post-IPO, with shareholders who were subject to post-IPO lock-in restrictions, shareholders’ agreement.
"The shareholders’ agreement, amongst other things, addressed the matter of MTN’s desire to be treated equally to other shareholders when it relates to aligning economic and voting rights, through a priority sale of the group’s proportion of shares that are non-voting," it said.