On Friday the Johannesburg Stock Exchange (JSE) launched an investigation into telecommunications giant MTN over alleged insider training, according to a statement by the JSE’s regulation manager Andre Visser.
It will be recalled that SaharaReporters obtained a confidential document from the offices of the Nigerian Communications Commission(NCC) which portrayed MTN Nigeria as a serial offender regulations and explained how the staggering fine of $5.2 billion was levied against them.
On Monday MTN’s stock was sold-off at an extremely high rate. However, the company did not notify its shareholders of the fine until later on in the day. South African financial law stipulates that companies notify their shareholders about any price-sensitive information immediately.
The fact that MTN notified their shareholders so late tipped off regulatory agencies and investigators to the possibility that insider trading occurred.
If the probe proves that insider trading did occur, MTN could face yet another fine from the South African bourse operator or even criminal charges. “It just puts the company under additional pressure,” said Amy Cameron, a telecoms analyst at BMI Research when speaking to Vanguard Newspaper, “It will be another really big challenge.”
The South African investigation coincides with the announcement by the NCC that it has given MTN until November 17 to pay its $5.2 billion fine. According to a statement issued by the NCC spokesperson the outcome of the JSE probe could impact the deadline to pay the fine.
Currently the NCC is in talks with MTN’s CEO, the senior management in Nigeria, the JSE, the office of the Nigerian President, and Nigeria’s internal security agencies. Thus far, no official statement of any of these parties has been issued regarding the outcome of the talks.