MTN’s decision to transfer the operation of its towers in Nigeria from IHS Towers to rival American Tower Corporation (ATC), was the last straw for investment firm Blackwells Capital which is calling for the resignation of IHS chairman and CEO Sam Darwish.
In a statement, Blackwells chief investment officer Jason Aintabi said that since IHS Towers went public in October 2021 there had been “large-scale governance, operational and strategic failings which continue to impact the value of our investment.”
Blackwells had previously called for Darwish to step down, and labelled his board as “inept” and “kowtowing to his whims.”
“Even the most basic suggestions have been met with resistance, despite the company’s share price dropping nearly 82% to date and a growing wave of unaffiliated shareholders voicing their concerns with the company’s failings,” said Aintabi.
The executive then pointed out MTN Group's recent decision to transfer 2,500 tower contracts from IHS to rival ATC, showcasing how the “state of affairs has grown so dire that IHS’ largest investor would rather send business to a direct competitor than support the Company”.
The recent news followed IHS reporting a US$1.25 billion loss in Q2 which was attributed to foreign currency losses, and shareholders were apparently reassured this was to be mitigated by effective hedging strategies. The losses were experienced in Nigeria, noted Aintabi.
“What is clear to Blackwells is that the status quo at IHS cannot continue – as the company’s share price decline of more than 30% in the past two days alone demonstrates. This board and Mr. Darwish must no longer be allowed to hide behind Cayman law to avoid accountability and proper disclosures. We believe the Board must be reconstituted immediately with shareholder-designated directors and that the process to appoint a new CEO must begin in the near term. Only then can the hard work begin of cleaning up the mess that this Board and its current CEO have perpetuated since day one.
“Blackwells is hopeful that the Board will recognize the will of shareholders and act promptly. However, should the IHS directors instead choose to continue entrenching themselves and squandering shareholder capital in the process, we have taken steps to initiate proper legal action to ensure that leadership changes this Company so desperately needs can occur,” said Aintabi.
IHS declined to comment.