African Tower Firm, IHS in Shareholder Dispute Over Corporate Governance

...Wendel, MTN demanded better representation on the board

On Wednesday, the annual meeting of IHS Holding Ltd. developed into a tense dispute over investor authority, after the African tower operator rejected demands from two of its top stakeholders.

Wendel SE and MTN Group Ltd., which own roughly 45% of the firm, argued that all shareholders with at least a 10% holding should be able to nominate board members, according to the people, who did not want to be identified because the topic is private. The ideas were rejected by the IHS board, they said.

“The proposals requested to be put forward were not in the best interests of the company as a whole or our collective shareholder base,” IHS said in a statement responding to Bloomberg’s questions. IHS said the board determined the proposal was “designed to benefit certain large shareholders to the detriment of other shareholders.” 

As of the time of filling this report, Wendel and MTN declined to comment.

Some investors are looking for a change after IHS’s stock plummeted, losing 60% of its market value since its initial public offering in New York in 2021. Tower companies in Africa are struggling to cope with large demands for investment in their networks to cope with surging broadband and smartphone use.

The two shareholders also said IHS management failed to give notice of their proposed resolutions in a timely fashion and are demanding the general meeting be reconvened to consider them, according to the people.

MTN also sought to convert its non-voting shares into voting ones, and that motion was denied, the people said. Currently, MTN, which is Africa’s biggest mobile operator, owns a 26% economic stake and controls 20% of the voting rights, they said.

MTN does not have board representation currently, and Wendel has one representative, Frank Dangeard.

“Under our shareholders agreement, Wendel has the right to designate one director for nomination by the board from time to time, so long as Wendel holds at least 10% of the shares,” said IHS. “MTN does not have a similar right, which was agreed as part of the IPO to preserve IHS Towers’ independence from a significant customer,” the company added.

Before going public, IHS management clashed with Wendel over post-IPO voting rights in a dispute that delayed the share sale, Bloomberg reported at the time.