JOHANNESBURG Shares of MTN Group (MTNJ.J) took a beating on Tuesday after Africa's largest telecoms operator said its chief financial officer had resigned following unspecified allegations that were under investigation.
MTN said after the close of trade on Monday it had replaced Nazir Patel with Brett Goschen, who headed its operations in Nigeria, its biggest business after South Africa.
The allegations against Patel are subject to an "ongoing investigation which had been commissioned by the company," MTN said.
MTN's stock fell nearly 3 percent in early trade, before recouping some losses. It was down 2.6 percent to 174.90 rand at 1006 GMT.
"The company has obviously discovered something and has taken decisive action," said Sven Richter, head of frontier markets at Renaissance Asset Managers in South Africa, which holds a stake in MTN.
"We like to know that the company has depth of management that they can find someone who actually looks like a good candidate and put into position very quickly."
MTN has not announced who will lead its Nigerian operation following Goschen's promotion.
Patel, who took over as CFO in 2009, had served on the boards of a number of MTN subsidiaries and had also participated in several of its merger and acquisition activities.
Despite Patel's abrupt exit, Renaissance Asset Managers' Richter said the telecom is still a well run company operating in strong markets.
"We think actually this is a good buy at this point," he said.
Johannesburg-listed MTN, with businesses in more than 20 companies across Africa and the Middle East, has been the focus of several allegations over the last year.
In May Turkish rival Turkcell (TCELL.IS) withdrew a $4.2 billion lawsuit against MTN claiming the South African company had used bribery and other underhanded methods to bump it off a lucrative operating license in Iran.
MTN, which denied the charges, appointed an external committee to investigate the allegations and which later cleared it of any wrongdoing.
MTN was also accused of influence peddling for furnishing the house of the African Union's chairwoman, who is a former South African foreign affairs minister.
The company defended itself saying it had been asked by the South African government to help refurbish the house in Addis Ababa.
(Editing by David Dolan)