Former MTN Nigeria CEO in $1 million severance pay battle

By Joseph Ekeng

In a high-stakes legal showdown, former CEO of Smile Communications, Ahmad Farroukh, and telecommunications giant MTN find themselves embroiled in a bitter dispute over a substantial severance pay amounting to over $1 million (approximately R18.8 million). The contentious battle traces its origins back to an agreement established during the acquisition of Investcom by MTN in July 2006.

Farroukh, who formerly served as the CEO of MTN Nigeria, alleges that the conflict commenced when MTN refused to honor a pivotal arrangement that had its roots in Investcom’s policies. Rather than a traditional pension plan, Investcom had adopted an end-of-service payment structure for departing employees.

Providing some historical context to the dispute, it is crucial to note that Farroukh’s journey with Investcom began in 1995, and he continued his tenure there until MTN’s acquisition in 2006. The same year saw Farroukh’s transition to the role of CEO at MTN Nigeria, where he occupied various positions until his resignation in 2015.

During his nine-year tenure at MTN, Farroukh and his team presided over a remarkable transformation of MTN Nigeria. The subscriber base swelled from a modest 9 million to a staggering 40 million, accompanied by an impressive $8 billion in dividends distributed during his six-year stint as CEO.

However, when Farroukh sought to claim his rightfully earned end-of-service payment, MTN delivered a stunning blow. The telecommunications behemoth informed him that he did not meet the criteria for severance pay, citing a modification in the company’s policy.

So, what precisely does this policy entail? According to MTN, severance pay is only extended in cases of mutual separation or when a contract concludes without renewal—an explanation that has left Farroukh and his legal team locked in a fierce legal battle.

Farroukh’s pursuit of the disputed severance pay continues to reverberate within legal circles, raising questions about the intricacies of employment agreements and the obligations of multinational corporations to their former executives. As the courtroom drama unfolds, both parties stand resolute, with millions of dollars and the principle of fairness hanging in the balance.


Leave a Reply

Your email address will not be published. Required fields are marked *


    No comments found.