Telecommunications group MTN on Tuesday said it has requested the board of the IHS to call an extraordinary general meeting of its shareholders to consider a governance proposal which MTN submitted prior to the 2023 annual general meeting (AGM), and any other shareholder proposals relating to governance.

This followed IHS’s AGM, held on June 7, 2023, during which MTN’s submitted governance proposal was to be considered by all shareholders. However, IHS did not include the proposal on the agenda for the AGM as required by a shareholders agreement.

The group is awaiting a response from IHS, in which MTN, through its subsidiary Mobile Telephone Networks (Netherlands), holds about 85.2-million shares, or 26%.

MTN has been engaged in discussions with IHS regarding corporate governance matters since prior to its initial public offer (IPO) on the New York Stock Exchange in October 2021, with the group’s voting rights being capped at 20%.

“These discussions included the provisions of the shareholders’ agreement that was in place between IHS and its shareholders prior to the IPO; where an amended shareholders’ agreement was implemented post-IPO, with shareholders who are subject to post-IPO lock-in restrictions (shareholders’ agreement),” MTN said in an update to shareholders on Tuesday.

"The shareholders’ agreement, among other things, addressed the matter of MTN’s desire to be treated equally to other shareholders when it relates to aligning economic and voting rights, through a priority sale of the group’s proportion of shares that are non-voting.

"In view of IHS’ consistent share price underperformance since listing, MTN has not been able to dispose of the non-voting proportion of its shares and remains unable to vote all of its shares," MTN explained in the statement, noting that, in order to effect the aforementioned alignment of economic and voting rights, MTN submitted a governance proposal intended to protect important shareholder rights and to better align IHS’s corporate governance with other publicly traded companies.

Under the shareholders’ agreement and its articles, IHS was required to include the proposal on the agenda for the AGM, notify all other shareholders of the proposal and allow shareholders to vote on the proposal at the AGM.

However, MTN strongly believes that IHS has wilfully breached the shareholders’ agreement and articles by failing to notify its shareholders of the proposal and denying its shareholders the opportunity to vote on it at the AGM.

Beyond the call for an extraordinary general meeting to consider the proposal, and any other shareholder proposals relating to governance, MTN is currently evaluating all its options with the intention of fully enforcing the shareholders’ agreement and articles.