Posted by Nick Headley | 6 June 2018 | 979 times
The Hawks last week raided the offices of MTN and the mobile operator’s lawyers, Webber Wentzel, to look for evidence of corruption related to MTN’s 2005 Iranian deal.
Rival operator Turkcell claims MTN won its licence in Iran by bribing officials. The two companies have been in court over the matter since 2012. Turkcell, which lost out on the licence, is seeking as much as $4.2bn from MTN. Iran is MTN’s third biggest market, via its 49% stake in Irancell.
MTN said on Tuesday representatives from the Directorate for Priority Crime Investigation – the Hawks — had “visited” MTN and Webber Wentzel’s offices to obtain documents relating to Turkcell’s lawsuit.
“MTN is co-operating fully with this investigation,” it said.
Turkcell’s claim was “opportunistic, an abuse of the process of court, baseless and without merit”, it said.
When Turkcell first made the claims, MTN appointed an independent special committee chaired by international jurist Lord Leonard Hoffmann to investigate the allegations. “Lord Hoffmann … found that Turkcell’s allegations, which rested entirely upon the evidence of one Mr Christian Kilowan, were all ‘a fabric of lies, distortions and inventions’, and that Mr Kilowan was shown to be ‘a fantasist and a conspiracy theorist’,” MTN said.
The report had found that there was no conspiracy between MTN and Iranian officials to sideline Turkcell; that there were no pledges to get SA’s government to supply defence equipment to Iran or to support Iran’s nuclear policy; that there had been no bribes to officials; and no “sham loans” from MTN to its Iranian partners, MTN said.
Turkcell’s repeated attempts at litigation “are contrary to the interests of justice”, the operator said. “To the extent that Turkcell may contend that any new issues have been raised in their summons, these issues were considered and disposed of in the Hoffmann Report.”
MTN said it had given the Hawks a full copy of the report, together with detailed annexes. MTN’s share price closed 2.2% lower at R116,24 on Tuesday.
Mergence Investment Managers portfolio manager Peter Takaendesa said investors had not been overly concerned about the issue as Turkcell’s four previous lawsuits – including the initial court case in the US in 2012 — had all failed.
“The market has not priced in a negative outcome,” Takaendesa said, referring to Turkcell’s $4.2bn claim.
However, the legal process was likely to take a long time to resolve, he said.
MTN CEO Rob Shuter said earlier in 2018 that the group viewed Turkcell’s claims as “a spurious set of allegations that have been tested now in three or four separate legal processes, all of which we’ve prevailed in”.
“And now comes the final spin around the dance floor, and we maintain that there was no untoward behaviour, corroborated by the Hoffman Report, which is very detailed and publicly available. It’s a fairly well-ventilated situation and it is increasingly odd to us that they’re carrying on with it.”
Meanwhile, MTN also faces possible difficulties in repatriating cash from Iran, after US President Donald Trump said he would withdraw from the multinational nuclear deal with the country.
MTN has about €200m of legacy cash in Iran. It managed to extract about €60m from its Iranian business in the six weeks leading up to Trump’s announcement in early May.
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