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Saudi’s Mobily names new CEO amid irregularity probe

Ahmad Farroukh, former MTN Group executive, will assume the position on Sunday, July 12

 

Saudi Arabia’s second-largest telecom operator, Etihad Etisalat – a.k.a. Mobily – has named Ahmad Farroukh as its new chief executive effective from Sunday, it said in a statement.

Chairman Suleiman bin Abdulrahman Al-Gwaiz had recently revealed to a newspaper that the company would be soon hiring a new chief executive. The operator removed its previous CEO Khalid Al-Kaf in February, who had been suspended since November 2014 when the company first revealed significant accounting issues. Deputy CEO Serkan Okandan has been serving as temporary head since then.

Mobily has been under investigation by Saudi Arabia’s Capital Market Authority since last year and the regulator had assigned a special team to look into Mobily’s finances. The team raised concerns over some of the telco’s contracts with customers, including those for fibre networks. The operator has since been forced to restate financial statements dating back to 2013, incurring huge losses in the process.

Shares of Mobily were suspended from trading since June 8, 2015, when after the CMA team raised concerns over the accounting approach used in some of the operator’s contracts.

UAE-based Etisalat owns a 28 per cent stake in Mobily, which has laid off approximately 400 non-Saudi staff in the recent months in a bid to control costs.

Farroukh was previously head of leading emerging-markets mobile operator MTN Group’s South African business, but resigned last week due to personal and family reasons. Farroukh would leave by the end of July, MTN said, at a time when the group’s staff in the country has been striking for nearly two months demanding higher pay.

Farroukh brings “a proven track record of success in the area of financial management, audit and operations,” Mobily said in its bourse filing.