VENTURES AFRICA- Black Economic Empowerment investment company Shanduka Group has debunked claims that it broke corporate governance rules in its $335 million acquisition of a minority stake in MTN Nigeria.
The acquisition, which was made from three private investors, raised eyebrows due to company’s link with South African politician cum businessman, Cyril Ramaphosa who doubles as the founder of Shanduka Group and Chairman of MTN Group,
According to Shanduka Resources Managing Director, Nandkishor Moharir, the company had sought legal counsel before it proceeded on the deal and it had been assured that the deal was legitimate since it is done through the Shanduka Telecommunication Mauritius.
Moharir explained that Ramaphosa had declared his interest to the MTN Board but he did not participate in the deal negotiations.
Shanduka CEO, Phuti Mahanyele said, “It was a transaction that was very straightforward, run by the head of our infrastructure business – it was a typical M&A transaction that we did. The discussions were between us and the private equity fund so the negotiations were between the two parties and from that perspective it was a typical routine transaction that we would do.”
She added that “At no stage were there any negotiations (with MTN) itself but rather with the private equity entity that was seeking to divest from the business.”
Moharir validated Mahanyele story that no contact was made with MTN regarding the acquisition.
On the allegation levied on the legality of the deal, Mahanyele said: “I would disagree — this is not an investment that was exclusive, it’s an opportunity that was available to any investor. From that perspective I’m not sure why we would be precluded from participating.”
MTN Nigeria is the the largest subsidiary of MTN Group and the biggest mobile operator in Nigeria with over 45 million subscribers as at September 2012. South Africa’s MTN Group holds 78.8 percent stake of the Nigerian unit.