"Former Spacefon CEO in $1m severance pay dispute with MTN"

" Former Spacefon CEO in $1m severance pay dispute with MTN \r\n\r\nFormer Spacefon CEO in Ghana, before the company was acquired by MTN in 2006, Ahmad Farroukh is locked in a legal dispute with his former employer over more than $1 million in severance pay.\r\n\r\nCourt hearing for the matter is set for October 16, 2023 following the breakdown of arbitration after six years of back and forth.\r\n\r\nFarroukh, who now serves as group CEO of Smile Communications, said the dispute arose when MTN refused to honour an agreement regarding \u201cend-of-service\u201d payments.\r\n\r\nThese agreements originated at Investcom,\u00a0 a company MTN acquired \u00a0in July 2006. Investcom owned Spacefon, which became Areeba in Ghana, with Farouk as CEO. But the brand name was changed to MTN and Farouk was moved to Nigeria and later to South Africa.\r\n\r\nFarroukh explained that instead of a pension plan, Investcom provided an end-of-service payment for employees who left the company.\r\n\r\nEnd-of-service payments were structured similarly to regular severance \u2014 employees who left the company got one month\u2019s salary for every year\u2019s service.\r\n\r\nFarroukh started at Investcom in 1995 and was at MTN from when it acquired the company in 2006 until 2015 \u2014 19 years overall.\r\n\r\nHe became CEO of MTN Nigeria in 2006. He served in three other executive roles over the next nine years, first as vice president of West and Central Africa, then as Group Chief Operating Executive overseeing 19 countries in Africa and the Middle East.\r\n\r\nIn 2014,\u00a0 he was appointed CEO of MTN South Africa. \u00a0The CEO at that time, Zunaid Bulbulia, became Group Chief Operating Executive.\r\n \r\n \r\n\r\nA year later,\u00a0 Farroukh agreed to step down \u00a0amid a protracted strike in its seventh week by the time he left MTN.\r\n\r\nCall centre and franchise staff had downed tools unless their demands for higher salaries and bonuses were met.\r\n\r\nFarroukh said his split from MTN had been amicable.\r\n\r\n\u201cI spent a good nine years at MTN, and I had been happy,\u201d Farroukh told MyBroadband.\r\n\r\n\u201cUnder my management, with my team, we took Nigeria from 9 million subscribers to 40 million,\u201d he said.\r\n\r\n\u201cWe paid $8 billion in dividends during my six-year tenure at MTN Nigeria.\u201d\r\n\r\nHowever, when he wrote to enquire about his end-of-service payment, MTN refused to pay.\r\n\r\nFarroukh said he received a letter from MTN executive chairman Phuthuma Nhleko telling him he did not qualify for severance.\r\n\r\nNhleko, MTN\u2019s former Group CEO, had taken over as executive chair following the \u201cresignation\u201d of Sifiso Dabengwa.\r\n\r\nDabengwa stepped aside after Nigeria\u2019s telecommunications regulator\u00a0 tried to slap MTN\u00a0 with a 1.04 trillion naira fine for allegedly failing to implement the legal requirement for proper customer identification during SIM registration.\r\n\r\nThe regulation, which included know-your-customer provisions, required networks to obtain proof of identity and address from customers during SIM registration but MTN failed to implement.\r\n\r\nAccording to the Nigerian authorities, MTN had failed to cut off subscribers who had not provided the necessary documentation by a set deadline.\r\n\r\nFarroukh said that in the letter from Nhleko, MTN said he did not qualify for his end-of-service payment because the company had changed his policy.\r\n\r\nSeverance would only be paid if a contract ends and is not renewed, or after mutual separation.\r\n\r\nHowever, Farroukh contends this change of policy was never communicated.\r\n\r\nHe also said there have been dozens of similar cases where MTN ultimately paid.\r\n\r\nWith the case dragging since 2017 \u2014 six years \u2014 Farroukh said MTN appears to be trying to stall the matter.\r\n\r\nHe explained that he tried to resolve it amicably before the case went to an arbitrator.\r\n\r\nWhen the arbitration broke down, he instituted legal proceedings.\r\n\r\nThe date for the first hearing is set for 16 October 2023.\r\n\r\nMTN declined to comment.\r\n\r\n\u201cDue to the legal nature of the ongoing matter, MTN is unable to comment at this time,\u201d a spokesperson told MyBroadband.\r\n\r\n \r\n "

"Former Spacefon CEO in $1m severance pay dispute with MTN"

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