MTN faces bribery allegations as Turkcell appeals to the Constitutional Court

MTN and some of its former employees – Phuthuma Nhleko and Irene Charnley – have headed to the Constitutional Court to fend off a local court hearing an argument by Iranian rival, Turkcell, that it was involved in bribery and corruption in that country. 

At the beginning of the month, Turkcell won a landmark judgement in the Supreme Court of Appeal (SCA) that made it possible for Turkcell to present evidence that it believes shows that MTN committed acts of bribery and corruption to overturn the award of an Iranian GSM licence to Turkcell. 

Turkcell doesn’t think the apex court should hear the matter, as the SCA’s majority judgment was well-reasoned and correctly applied the established legal principles regarding jurisdiction that MTN and the other defendants invoked to seek to delay the trial. 

The SCA ruling set a precedent in that it was the first time a South African court had been asked to determine whether allegations of misconduct that apparently took place in another country could be heard locally. 

Cedric Soule, global counsel for Turkcell, alleges that MTN’s actions caused it more than $4.2 billion in damages.

Africa’s largest mobile network operator has said that it has always “maintained that the Turkcell litigation was without merit and has expressed confidence that it would successfully defend these proceedings”.

In 2012, the UK’s Lord Leonard Hoffmann released a report that exonerated MTN of any shady dealings in securing the licence. In part, the report stated: “All the allegations are a fabric of lies, distortions and inventions.” This report also cleared Charnley, then VP for the Middle East and North and East Africa, and Nhleko, who was then CEO, of any wrongdoing.

In a statement issued on Thursday, Turkcell noted the move by MTN to appeal the SCA’s ruling in the Constitutional Court. “The Constitutional Court will now decide whether to hear the appeal filed by MTN and the other defendants in this ongoing legal battle that dates back to 2013,” said Turkcell. 

MTN had not informed the market that it had gone to the highest court in the land, although it previously said it may do so. Its Iranian operation has been marred by hyper inflation in that country, its quarterly update for the three months to March, released in the middle of this month, showed. Comment from MTN has been requested and will be published as soon as it is available.

Turkcell’s legal wrangle with MTN dates back more than a decade when it initially approached the US courts in an action it later retracted, arguing that MTN won its 49% of a telecommunications licence in Iran through paying bribes. 

The Turkish operator argues that MTN paid off both Iranian and South African officials to overturn a public tender, which it lost to Turkcell, for a multi-billion-dollar opportunity to run an Iranian GSM telecom licence, it has said. “This case has significant implications for South Africa's stance on international bribery and corruption,” it said in a statement this morning. 

MTN has denied these allegations*

*This is a developing story

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