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Africa's largest mobile operator, MTN, has called for an extraordinary shareholders' meeting of New York-listed IHS Towers as it battles the group's board over voting rights.
MTN holds 26% of IHS, which was founded in Nigeria and operates nearly 40 000 towers in Africa, the Middle East and South America, but its voting rights are capped at 20%.
According to Bloomberg, MTN, along with French investment company Wendel – which owns 19% – demands that those holding 10% or more of IHS get to nominate board members, but this had been dismissed by IHS.
The group said on Tuesday it has been engaging IHS on corporate governance matters, including on its voting rights, but IHS failed to notify shareholders of its proposal or allow them to vote on it at its annual meeting on 7 June.
READ | New York-listed IHS - part-owned by MTN - in tense shareholder standoff
MTN doesn't have a representative on the IHS board, although its former CEO, Phuthuma Nhleko, is a non-executive director.
MTN said on Tuesday it "strongly believes that IHS has wilfully breached" its shareholder agreement by failing to place the proposal on the agenda, notify all other shareholders, and allow them to vote on it.
IHS Towers said on Wednesday it had unanimously determined that the recent shareholder proposal from MTN was "not in the best interests of IHS Towers as a whole or our collective shareholder base". The group said it declined the request to submit the proposal, which was in accordance with its articles and shareholder agreement.
"MTN does not have the right to call an extraordinary general meeting under our articles or shareholder agreement," it said. "IHS Towers remains focused on increasing shareholder value and will continue to engage with MTN as we do with all our shareholders.”
The company said MTN’s voting rights have been capped at 20% since 2014 per agreement in order to preserve its independence and account for the fact that MTN is its largest customer.
In 2022, MTN sold its more than 5 700 towers to IHS for R6.4 billion under a leaseback agreement.
READ | MTN concludes R6.4bn sale of cellphone towers to IHS
The mobile operator has been looking to dispose of the non-voting portion of its shares in IHS, but has said it has been unable to do so given its view that IHS's share price "materially undervalues" the business. IHS shares have about halved in value since listing in October 2021.
IHS was founded by Lebanon-born Sam Darwish in Nigeria in 2001. He remains chairperson and CEO of IHS. The board also includes former Florida governor and failed candidate for the US presidency, Jeb Bush, along with the former CEO of Xerox, Ursula Burns, who also sits on the Uber and Nestle boards.
This article has been updated to include a response from IHS Towers.
