IHS Towers, one of Africa’s leading telecommunication infrastructure providers, has come under scrutiny for its refusal to grant MTN Group and Wendel SE greater representation on the board. MTN Group and Wendel SE, two of IHS’ largest shareholders, submitted a proposal to get better representation on the board during the company’s annual general meeting held on June 7, 2023. However, the proposal was shut down and not even presented for voting.
The investor community is paying close attention and experts say the way this matter unfolds will have significant implications for IHS, its shareholders, and the macro marketplace.
MTN Group owns a 26% stake in IHS, while Wendel SE holds 19%, making them significant stakeholders in the company with a combined 45%. The proposal submitted by MTN and Wendel sought to allow shareholders with up to 10% stakes to nominate board members. However, IHS’ board disagreed, claiming that the proposal was not in the best interest of the company.
Other key shareholders of the company include; Emerging Capital Partners LLC (11.85%), GIC Pte Ltd. (5.4 %), Issam Darwish (3.5 %), Goldman Sachs International (1.3%) William S. Saad (0.95%) Goldman Sachs & Co. LLC (0.9%) Mohamad Darwish (0.5%) and Bashir Ahmad El-Rufai (0.3%).
The actions of IHS are concerning and could have significant implications for the company’s governance structure and set wrong precedence for the market. Effective corporate governance is essential for a company’s success and long-term sustainability. It ensures that there is transparency and accountability, and decisions are made in the best interest of the company and its stakeholders.
IHS is hampering good governance and making it difficult for shareholders to have a say in the company’s management. The proposal submitted by both companies was in line with international best practices, where significant shareholders with a vested interest in a company’s success are given the opportunity to nominate members of the board.
The board’s refusal to grant MTN Group and Wendel greater representation on the board raises concerns about its commitment to transparency and accountability. It also raises questions about the company’s management practices and its stewardship of shareholders’ investments.
Said one source: ‘They’re doing everything but listen to the request of their biggest shareholders. I wonder really what the CEO and Chairman are afraid of. There is a shareholders agreement that is clear on these matters; and a proposal has been put forward. However this is decided will have strong implications not just for IHS, but for the investor community and the market in general.’
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