Following the announcement of the abrupt departure of its CEO, MTN SA has not disclosed its succession plan, or openly discussed the reasons for Ahmad Farroukh's unexpected resignation.
On Monday, the country's second-largest mobile operator confirmed Farroukh would leave at the end of the month, following weekend speculation that he had tendered his resignation after less than a year in the top position.
While MTN described the move as "a difficult decision to take for Ahmad, but unavoidable due to personal and family reasons", there is little clarity around why the Lebanese-born Farroukh chose to end his tenure so abruptly.
An MTN source says Farroukh's family, who live abroad, were not happy for him to remain at the helm of the company, as they fear for his safety due to the protracted Communication Workers Union strike. The source also explains Farroukh has been worrying about the effects of the industrial action on the company and is disappointed with its inability to bring the strike to an end.
However, analysts remain sceptical, saying an obvious lack of transparency surrounds the issue. Ovum analyst Richard Hurst believes there is "something else going on that we just don't know about".
"The timing, with it happening so suddenly and in the middle of the strike, raises more questions than it actually answers," he says.
"It's all a bit sudden in the wake of the labour unrest, and there seems to be a lack of transparency that is clouding this issue."
Hurst points out investors - big and small - are unlikely to be impressed with the way Farroukh's departure has been handled. "Investors don't like this type of uncertainty."
Strike force
Independent analyst Spiwe Chireka agrees the real reasons for Farroukh's departure have not yet been revealed. "We're not yet clear about his reasons for leaving. Perhaps he is moving on to better things - this is, after all, a very incestuous industry."
Chireka argues the ongoing strike - which has had limited impact on MTN's operations during the past eight weeks - is not a good enough reason for Farroukh to be stepping down.
"They can't simply pin it to a strike. There must be other reasons for this move."
Dobek Pater, a telecoms analyst with Africa Analysis, concurs there is more than meets the eye to Farroukh's resignation. "Saying personal reasons is the obvious generic excuse everyone uses. And I'm not so sure if it's just the strike either."
Pater points out Farroukh's tenure as MTN SA CEO has not been easy. "He has had to oversee retrenchments, cost-cutting exercises and turnaround strategy, which is still in the process and will likely take six months to a year before it starts having an effect."
Pater says there is also much pressure on MTN at the moment to become more competitive, especially in the enterprise space, where MTN Business needs to be more profitable.
"It's not easy - the strike could be an element, but there seems to have been a combination of issues. I suppose a lot also comes down to his personal character. Perhaps Farroukh got tired of fighting fires and having to keep the ship afloat."
Pater also notes it is not known what transpired between Farroukh and the MTN board - whether he simply resigned, as was reported in the media, or whether he was pushed.
Talent search
MTN SA has also been cagey about its succession plans, saying in an earlier statement: "A successor to Farroukh will be announced as soon as the new appointment is finalised." Attempts to obtain further details from MTN about its CEO hunt were unsuccessful, but analysts feel MTN should be able to fill the position fairly easily.
"Will they be looking internally, especially considering the timing of Farroukh's resignation? Probably. Considering they have 22 operations to look at in terms of finding a replacement, it should not be too difficult," says Hurst.
He says MTN SA will likely adopt a gradual and studied approach to finding a new CEO, so as to avoid sending any further mixed messages to the market.
Chireka feels MTN SA usually has a solid succession plan in place and believes there is enough talent within the group for the company to fill the position comfortably. "They certainly seem to have enough talent within the top structure."
Meanwhile, Pater argues if the resignation did indeed come from Farroukh's side, then MTN SA's board and senior management might not have been fully prepared for the move. "But keep in mind, MTN SA is a very attractive company to work for, so they shouldn't have much trouble attracting candidates if they choose to look externally.
"The only challenge will be to find someone who will be able to manage the current environment, because it's not going to get any easier."
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