Home News MTN says rival Turkcell threatens suit over Iranian deal

MTN says rival Turkcell threatens suit over Iranian deal

Published on 03/02/2012

South African mobile telephone operator MTN said Friday that rival Turkcell has threatened to sue it in a US court for alleged corruption involving a deal in Iran.

MTN said Turkcell has accused the South African group of bribing government officials and pressing Pretoria to endorse Iran’s nuclear programme in exchange for rights to an Iranian GSM mobile operating licence.

“Turkcell has informed MTN that it believes it has a claim against MTN and its relevant subsidiary, arising out of the award of (Iran’s) second GSM licence, based on alleged violations of United States laws, and has indicated an intention to bring such a claim before a United States court,” an MTN statement said.

MTN owns a 49-percent stake in the Iranian mobile telecoms company Irancell, which holds the operating licence. Turkcell subsidiary East Asian Consortium made an unsuccessful bid to acquire the licence in 2005.

MTN said it would name an panel to look into the allegations, led by retired British judge Lord Leonard Hoffmann and including non-executive members of its board.

“Irrespective of the validity of Turkcell’s claims, the very fact that such allegations have been made is serious,” MTN chairman Cyril Ramaphosa said in a statement.

“MTN has zero tolerance for corrupt and unethical business practices. MTN’s response must be measured and authoritative, reflecting the seriousness with which we take any claims of this nature.”

MTN said Turkcell also alleged that MTN had made “improper payments” to an Iranian and a South African government official, and had encouraged the South African government to take a favourable stance on Iran’s nuclear programme at a 2005 meeting of the International Atomic Energy Agency.

The Turkish company is also said to have claimed that MTN had enlisted South African support for the provision of military equipment to Iran.

MTN, which operates in 21 countries in Africa, Asia and the Middle East, has came under fire for its Iranian operations from the influential US lobby group United Against Nuclear Iran, according to a report in the Wall Street Journal.

The Turkcell dispute comes as Washington is pressuring allies to cut business ties with Tehran.

MTN’s 33 million clients in Iran make up 21 percent of its total subscriber base.