Turkcell making damning allegations against MTN

MTN. It is complicated always with a business that is in multiple geographies, especially as I sometimes say, not exactly places that you would vacation in. One such place that has been under the spot light for a while is Iran. And quite a few folks are getting more than a little agitated about this, Iran are reportedly close to having a handful of bombs of the nuclear kind. That worries other people who have that capability too. MTN has a business in Iran, quite a good one. They beat Turkcell in the last round of the bidding process and as far as I could understand it at the time because they (MTN) were not as excited about having to own 50 percent plus 1 share. Turkcell wanted that. But at the time I think that Turkcell also had a connection to Israel, and let us be honest, the two countries, Iran and Israel are as far apart as you could ever get, in terms of relations. But that aside, MTN pipped Turkcell to the post and their Iranian business is huge.

But there are some very damning allegations that Turkcell are making not only against MTN, but against a South African official who is not yet named. Very damning, make want you want of this, but make sure that you read it carefully.

"Turkcell has informed MTN that it believes it has a claim against MTN and its relevant subsidiary, arising out of the award of the 2nd GSM Licence, based on alleged violations of United States laws (the Turkcell US Claim), and has indicated an intention to bring such a claim before a United States court. No such claim has been filed or served.


As MTN understands the Turkcell US Claim, it would allege that, in approximately 2004 to 2005, in an effort to cause the Iranian government to issue the 2nd GSM Licence to MTN rather than Turkcell, MTN made improper payments to an Iranian and a South African government official; that MTN encouraged the South African government to take a favourable position toward Iran's civil nuclear power development programme at a meeting of the International Atomic Energy Agency in November 2005; and that MTN enlisted South African government support for the provision of military equipment to Iran. Turkcell has intimated a range of putative claim amounts, the nominal value of which, if formally asserted, would be material.

No basis for any such claim amount has been substantiated to date. The MTN Board of Directors, on legal advice, presently believes that the Turkcell US Claim lacks legal merit, and that, in any event, a US court would not have jurisdiction to entertain the claim." Wow. Amazing. All damning information if true.

MTN have responded: "The Board has appointed Lord Leonard Hoffmann, an internationally renowned jurist, to chair the committee, to oversee and validate its investigation, and to ensure the integrity and independence of the investigation." We wait and see what will transpire today. We will keep you posted on events.