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Turkcell vs MTN: War of words HEATS UP amid SA bribery court challenge

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JOHANNESBURG — Local mobile network MTN is trying to get a South African court to throw out Turkcell’s fifth attempt at litigation over alleged bribery that happened in 2004. For years, Turkcell has claimed that the South African network allegedly won its Iranian licence in 2004/5 through bribery and corruption. MTN and Iranian officials have denied the claims. Turkcell says it lost $4.2bn in prospective profits and is subsequently wanting to sue MTN for this amount. For the first time in this long-running battle, Turkcell earlier this year managed to convince the South African High Court that its $4.2bn claim against MTN can happen on South African soil. It’s an interesting development to watch, especially as MTN has only just recovered from its 2016 multi-billion Naira fine settlement in Nigeria for failure to disconnect about 5 million unregistered SIMs. – Gareth van Zyl

A visitor drives through the entrance to the headquarters of MTN Group Ltd. in Johannesburg, South Africa, on Thursday, Aug. 3. 2017. Photographer: Waldo Swiegers/Bloomberg
MTN press statement: Legal proceedings instituted by Turkcell against MTN Group Limited and other companies in the group

Johannesburg – MTN yesterday filed its plea (Statement of Defence) in the long-running litigation where Turkcell is claiming damages against MTN as a result of MTN having acquired a 49% interest in Irancell Communication Services Company (“Irancell”), which was awarded the second GSM License in Iran in November 2005.

MTN remains of the view that:

  • Turkcell’s claim is opportunistic, an abuse of the process of Court, baseless and without merit – we will not be bullied, harassed and oppressed in this matter and have every expectation that we will prevail;
  • Turkcell was the author of its own misfortune in failing to obtain the licence in Iran;
  • When it became clear that Turkcell was unwilling or unable to comply with the new legislative requirement that its shareholding in the licence be not greater than 49%, the Iranian authorities offered the opportunity to MTN, which it accepted;
  • Turkcell obviously regretted their decision and has ever since engaged in four different sets of legal proceedings, all of which have been lost;
  • Turkcell’s implausible allegations rest heavily on a disgruntled former MTN employee who has been described as a fantasist and a conspiracy theorist and whose allegations have been dismissed by an independent investigation as being a fabric of lies, distortions and inventions.

When the allegations made by Turkcell were first raised, MTN appointed an Independent Special Committee under the Chairmanship of the eminent international jurist, Lord Leonard Hoffmann, to investigate the allegations. Lord Hoffmann embarked upon a thorough and exhaustive analysis of the investigations.

When furnishing his comprehensive Report into his findings, Lord Hoffmann made the point that his Committee had ‘received full cooperation from the company and had been given unrestricted access to all individuals, information, documents and facilities’ which his Committee requested.

He also observed that there had ‘not been the slightest attempt by the company or its management to influence the Committee in its deliberations or Report’.

He found that Turkcell’s allegations, which rested entirely upon the evidence of one Mr Christian Kilowan, were all ‘a fabric of lies, distortions and inventions’; and that Mr Kilowan was shown to be ‘a fantasist and a conspiracy theorist’.

Lord Hoffmann was also very clear in finding that he was entirely satisfied that there was no conspiracy between MTN and Iranian officials to remove Turkcell from the licence process in Iran, that there were no promises made to procure the South African government to supply defence equipment to Iran or to support Iran’s nuclear policy, nor that MTN had advanced sham loans to its Iranian partners, nor indeed that any promises of payment to Iranian or South African officials were made or authorised by Mr Nhleko or Ms Charnley.

In the period since Lord Hoffmann made his Report, we have found nothing that would change his findings.

Indeed, earlier this year, Dr Mahmoud Vaezi, the Minister in Iran’s Ministry of Information and Communication Technology, also rejected Turkcell’s allegations in an exclusive interview with Islamic Republic of Iran News Agency. Minister Vaezi was reported to have said that all relevant documents have been looked at, with nothing to establish Turkcell’s claims.

The case in South Africa is the fifth time that Turkcell has attempted to pursue legal proceedings in respect of substantially the same issues.

Turkcell continues to pursue its claims only to harass and oppress MTN.

We consider that it is most unjust to burden MTN with a fifth round of litigation of substantially the same matters.

Turkcell’s four previous attempts, including proceedings before reputable international arbitration panels, failed. The ongoing attempt to re-litigate complaints that Turkcell have repeatedly litigated without success are contrary to the interests of justice. To the extent that Turkcell may contend that any new issues have been raised in their summons, these issues were considered and disposed of in the Hoffmann Report.

We have every confidence that this fifth ‘bite at the cherry’ will also fail.

The claim smacks of a desperate last measure to try and extract benefits to which it is not entitled

– Issued by MTN Group Corporate Affairs

Press statement from Turkcell:
Turkish telecoms company Turkcell

Istanbul – Turkcell is pleased to report continued progress in its litigation against the MTN Group and its former executives in South Africa alleging corruption and interference with the Iranian tender in 2004 and 2005.  After years of attempting to delay the case, MTN and certain of the Defendants have finally filed Pleas responding to the allegations of Turkcell’s particulars. While the MTN Pleas assert a variety of expected and meritless technical legal defenses, Turkcell is confident that they will be rejected by the Court, and that the case can now be scheduled for trial in the coming months.

Remarkably, MTN  finally admits to many of the allegations asserted by Turkcell that form the basis of its Claims.  

“Today’s events are a positive step forward in our case,” said Turkcell’s Executive Vice President – Legal and Regulation Serhat Demir, “and MTN’s admissions are confirmation of our claims.  We look forward to bringing the facts and the testimony before the Court at trial to prove our case in full.”

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