Please read the following case study carefully and then answer the questions below. cORPORATE GOVERNANCE AT MT Background 6 The MTN Group is a South African multinational telecommunications company that operates in more than 20 countries and is the leading mobile operator in Africa. In their 2014 Corporate Governance Report. (MTN, 2014, p.4) under the heading Statement of Commitment, the Board made the following statement. The MTN Group is committed to the highest standards of ethical behaviour from our directors management and employees. In line with this commitment. the Group continues to enhance and align policies, systems and processes to embed sound corporate governance principles and ethical standards. Guided by these principles and standards, directors and management are required to exercise rigorous ethical judgement in leading the Group and acting in the best interests of all stakeholders." Developments since the initial penalty In 2016 MTN recorded its first ever annual loss, The loss amounted to R1 103 million. (This was on the back of a 2015 proft after tax of R23 570 million). This related directly to the fact that a huge payment was made towards the fine. In the first 18 months after the announcement of the fine, the share price continued to slip and effectively lost 40 per cent, of its value. In the process, the company lost $10bn of its market value, this was largely due to its woes in Nigeria. Compiled and adapted from newspaper articles.

Questions

5.1 Can the events at MTN Nigeria during the period 2015-2016 be regarded as a breakdown in corporate governance? Fully motivate your answer. 6 marks

5.2 Several stakeholder groups have been affected by the events in MTN. Identify four such stakeholder groups and indicate how their interest was impacted or compromised. 8marks.

5.3 Which two of the MTN Board Committee's should be tasked to put measures in place that will avoid a similar incident in future and what would you suggest they do in order to prevent any further incidents. 8 marks

5.4 List four of the King IV principles that were compromised by this event and explain how each of the said principles were compromised. 8marks