Aftermath of Etisalat fiasco: NCC begins financial checks of telcos; directors to serve only 15 years
The Nigerian telecom regulator, Nigerian Communications Commission (NCC) has begun a regime of checks on operators in the telecom sector to ensure strict compliance of best practices through a Code of Corporate Governance which became active in November 2016.
This is one of the measures by the commission to engender consumer satisfaction, industry resilience, accountability and sustainability of businesses in the sector which now contributes a huge chunk to the nation’s GDP.
As part of the new push, NCC has sent out a team of chartered accountants to check the financial status of telcos as well as their technical well-being including network integrity. Using four key performance indicators (KPIs), the commission said it was all in line with the dictates of the new Code made public Tuesday to stakeholders.
After the financial meltdown which hit Etisalat (now 9Mobile) in which syndicated loans from a consortium were not serviced as at when due, the commission said it would be indirectly minding how funds are managed by the operators especially since some of the funds were funds from the subscribers through recharge.
Principle 11.9 of the Code states: “To ensure continuity and injection of fresh ideas, a Director may serve on a Board for a period of three3) terms of five(5) years each. No Director shall on any Board for a period exceeding a total number of 15 years.
“Subject to satisfactory performance and the provisions of CAMA, all Directors shall be submitted for re-election at regular intervals of five years. In order to guide decision of shareholders, names and sufficient biographical details of Directors nominated shall be accompanied by performance evaluation statement and any other relevant information”.
The Executive Vice Chairman of the NCC, Professor Umar Danbatta, said the Code was not to stifle innovation and growth among operators but to ensure sustainability and conformity to best practices by operators. He explained that the regulator was not interested in sanctions but that sanctions only apply as a last option when other advisory roles of the commission were not adhered to by any operator.
“We want to ensure that things are done the right way; that the books are transparent and that new ideas are injected by new and younger Board members at all times to complement the experience of the older Board members”, Professor Danbatta said.
The Nigerian telecom sector has attracted foreign direct investment in excess of $68 billion since 2001 and participants at the workshop in Lagos said there was the need to protect such investments and even grow it through adherence to global best practices.
L-R: Messrs. Olusola Teniola, Association of Telecoms Companies of Nigeria President; Daniel Asapokhai Executive Secretary, Financial Reporting Council of Nigeria; Professor Umar Garba Danbatta, Executive Vice-Chairman Nigerian Communications Commission (NCC); Senator Olabiyi Durojaiye, Chairman NCC Board; Mrs Irene Robinson Ayawale, Head/Legal Counsel Nigerian Stock Exchange; Messrs. Sunday Dare, Executive Commissioner NCC; Clement Omeiza Baiye, NCC Board member during the Code of Corporate Governance for telecom industry sensitization workshop in Lagos, Tuesday.