Turkcell Makes Its Case Against MTN
ISTANBUL -– The following is a statement from Turkcell.
Turkcell took legal action against South African telecoms group MTN related to the disputed mobile license in Iran in 2004 and a conclusion on the $4.2 billion lawsuit in South Africa is anticipated this year.
“We don’t have any doubt about our claims,” says Serhat Demir, Turkcell Executive Vice President of Legal and Regulation. “Turkcell is determined to pursue this rightful case and confident that the judge will rule in Turkcell’s favor. 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 trivialize the case. This lawsuit for compensation represents a global precedent case for companies investing in international markets under fair competition and legal justice, and recognized and followed globally as a case seeking for legal remedy.”
About Turkcell’s lawsuit against MTN
Turkcell was the highest bidder in the tender for the first private GSM license of Iran in 2004 and despite Turkcell met all the requirements before and after the tender, the license was given to South African telecoms group MTN. Turkcell claimed that MTN bribed former ambassador to Iran and filed a $4.2 billion lawsuit in South Africa in 2013 over the disputed Iranian license. The judiciary decided to go on a trial involving allegations that MTN bribed Iranian and South African government officials four years late in June 2017, delayed by MTN’s objections.
Simultaneously HAWKS, South Africa’s special unit against organized crime, were running an investigation on MTN and a number of government officials since 2004, based on Turkcell’s international bribery claims. Within the scope of the investigation Yusuf Saloojee, the former South Africa ambassador to Iran was arrested in the last February and later he was released on bail.
The allegations on Saloojee included receiving bribe from MTN during the process of giving the Irancell tender to MTN after taking it unlawfully from Turkcell. The South African police announced that Saloojee, now a retiree, had received 1.4 million rands (approximately $100.000) and used it to buy a house in Pretoria. Saloojee was suspiciously pronounced dead on March 18th.
Phuthuma Nhleko, Irene Charley and a number of high level 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. Other allegations are being involved in illegal actions such as supporting Iran’s nuclear program, supply of high tech defense equipment and bribing Iranian and South African officials in exchange for the GSM license. It’s claimed that all these activities including illegal ones, 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 in 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 USD for unregistered SIM card records in 2015. After negotiations, the amount was reduced to 1.7 billion USD and the Nigerian government agreed on a payment plan. This time in 2018 The Central Bank of Nigeria claimed that MTN had repatriated dividend 8.1 billion USD out of the country and demanded the money be brought back. Nigerian officials also claimed that MTN had approximately 2 billion USD unpaid taxes. MTN reached an agreement with Nigerian officials about the dispute on dividends and filed a lawsuit about the taxes.
Turkcell Iletisim Hizmetleri A.S. (NYSE: TKC)