M-Cell CEO Paul Edwards says while the market was surprised by the announcement that he is stepping down, his position was always a short-term one.
The market has been awash with rumours that there were sinister motives behind the move, which sees Edwards being replaced by current non-executive chairman Phuthuma Nhleko, but the official word from M-Cell is that when Edwards moved out of parent company Johnnic to take up the post in August last year he was appointed on a limited-term contractual basis.
There was an agreement that the board would work with him to identify a suitable long-term appointee to lead the company.
Edwards has rubbished market speculation about the announcement. "We expected that kind of thing, but if something sinister were going on, why am I staying on as CEO until the end of July?"
While an analyst says he is sceptical about whether Edwards was appointed on a short-term basis, since it was not announced at the time he took the post, Edwards says there was a decision not to announce it then.
"My appointment was always a short-term one. That is not something you tell the market when you take over at a difficult juncture. MTN was launching in Nigeria and Cell C was about to launch in SA."
He adds that part of his role was to implement a clean transition plan to appoint a long-term CEO, and he is working closely with Nhleko. "The market expects an orderly transition, and I believe we have given them that."
The M-Cell share was trading 3.67% or 55c down at 1 445c late this morning. The analyst says the share has not dropped any more than many other tech stocks, "so it`s really just market weakness rather than a reaction to the announcement".
"Edwards wasn`t overwhelmingly received by the investor community. Many of them didn`t find him authoritative enough when he was answering questions. The one thing is that [CFO] Rob Nisbet has always been key, and as long as he is there the institutions should be happy."
However, he adds that Nhleko has a low profile, and he does not know much about him.
Yvonne Muthien, group executive of M-Cell corporate affairs, says the shuffle is related to the unbundling of Johnnic, and Edwards was appointed on a short-term basis until a long-term CEO could be placed.
She says talk that the move was sinister "is ironic because it was a very well-managed transition, and Paul worked closely with the board in finding the right person to replace him".
Muthien says while Nhleko`s appointment is on a long-term basis she cannot say what the term of his contract is as "we haven`t finalised all the details yet".
She adds that the latest shuffle brings to an end the management changes at the company, with "no more reshuffling" being planned.
Edwards says Nhleko has been keen to emphasise that Nisbet will be staying on, despite market speculation to the contrary.
Nhleko, who has a BSc in civil engineering and an MBA, worked as a corporate finance manager at Standard Merchant Bank, after which he became a founder member of Worldwide African Investment Holdings as CEO and executive chairman in 1994.
Muthien describes him as a dynamic and highly skilled businessman who transformed a black empowerment start-up into an almost R4 billion enterprise.
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