Turkcell expects victory in $4.2bn MTN lawsuit before year-end

24 April 2019 | Jason McGee-Abe

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Turkcell has stated that it expects to win its $4.2 billion lawsuit against MTN by the end of this year.

Turkcell took legal action against South African telecoms group MTN as result of the disputed 2004 mobile licence in Iran and a conclusion on the lawsuit in South Africa is anticipated this year.

“We don’t have any doubt about our claims. Turkcell is determined to pursue this rightful case and confident that the judge will rule in Turkcell’s favour,” said Serhat Demir, Turkcell executive vice president of legal and regulation.

“The seizure of documents during the investigation, the criminal case, the arrest and suspicious death of Ambassador Saloojee proves Turkcell’s claims. We expect solid developments and a fair conclusion from South African police and judiciary about the lawsuit by the end of this year – MTN’s continuous denial and lack of a tangible statement will no longer prolong and trivialise the case. This lawsuit for compensation represents a global precedent case for companies investing in international markets under fair competition and legal justice, and recognised and followed globally as a case seeking for legal remedy.”

Turkcell’s lawsuit against MTN

Turkcell was the highest bidder in the tender for the first private GSM Iranian licence in 2004, but despite meeting all the requirements before and after the tender, the licence was awarded to South African telecoms group MTN. Turkcell claimed that MTN had bribed the former ambassador to Iran and filed a $4.2 billion lawsuit in South Africa over the disputed Iranian licence in 2013. The judiciary decided to go on a trial involving allegations that MTN bribed Iranian and South African government officials four years later in June 2017, delayed by MTN’s objections.

South Africa’s special unit against organised crime, HAWKS, ran an investigation into MTN and a number of government officials as a result of Turkcell’s international bribery claims. Within the scope of the investigation, Yusuf Saloojee, the former South African ambassador to Iran was arrested in February and was later released on bail.

The allegations on Saloojee, who passed away on 18 March, included receiving bribes from MTN during the process of giving the Irancell tender to MTN after taking it unlawfully away from Turkcell. The South African police announced that Saloojee, now a retiree, had received 1.4 million rands (c. $100,000) and used it to buy a house in Pretoria.

“Phuthuma Nhleko, Irene Charley and a number of senior MTN executives were the main actors in the company’s expansion strategy, including Iran during early 2000s. Therefore the claims are, they played a part in the approval and implementation of decisions during the Iran tender process,” the company said in a statement.

“Other allegations of illegal actions include supporting Iran’s nuclear programme, supplying high tech defence equipment and bribing Iranian and South African officials in exchange for the GSM licence. It’s claimed that all these activities, including illegal ones, which were run by MTN to secure the tender after the announcement of Turkcell’s win, were implemented under the code name “Project Snooker”.”

MTN faces problems not only in South Africa but also Uganda and Nigeria. The company’s Uganda CEO was deported over national security concerns and in recent years a number of disagreements arose in Nigeria because of unregistered SIM cards and corruption allegations concerning dividend payments. The Nigerian Communication Commission had fined MTN $5.2 billion for unregistered SIM card records in 2015. After negotiations the amount was reduced to $1.7 billion and the Nigerian government agreed on a payment plan.

In 2018, the Central Bank of Nigeria claimed that MTN had repatriated dividend $8.1 billion out of the country and demanded the money be returned. Nigerian officials also claimed that MTN had approximately $2 billion in unpaid taxes. MTN reached an agreement with Nigerian officials about the dispute on dividends and filed a lawsuit about the taxes.