Saudi Arabia-based operator Mobily has hired MTN and Orange executives as its new CEO and CFO following a troubled period at the company that recently culminated in a restatement of earnings for 2014 and the first quarter of 2015.
According to statements from shareholder Etisalat, Ahmad Farroukh--until recently the CEO of MTN South Africa and Nigeria--is to take up the role of Mobily CEO. He replaces former CEO Khalid al-Kaf, who was suspended in November last year and finally removed from the board in February.
The MTN group only announced Farroukh's resignation "for personal and family reasons" last week, with effect from July 31.
Mobily is also gaining a new CFO in the form of Kais Ben Hamida, who currently holds the position of CFO at Orange-owned Mobinil in Egypt.
The Saudi company is now entering a period of restructuring after it lost more than half of its market value since October. The company began reporting accounting errors late last year that it said were attributable to excessive booking of revenue from wholesale broadband leases and mobile promotional campaigns.
The revelations of the errors prompted the Capital Market Authority (CMA) to launch an investigation into the company's finances in November last year. In June, Mobily re-evaluated its accounts for the year 2014 and the first quarter of 2015, which caused earnings to be adjusted.
Bloomberg noted that the company has previously said the 2014 loss will increase by about $221 million ($199 million) after revising accounting policies. The company is due to report its second-quarter earnings in July.
Pyramid Research recently reported that total mobile and fixed services revenues in Saudi Arabia declined in 2014 for the first time in a decade due to aggressive promotional activity and Mobily's restatement of financial result
Nonetheless, Pyramid Research said the Saudi Arabian telecoms market remained the largest in terms of total service revenue in the MEA region in 2014 with $16.2 billion.
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