Cyril left red-faced as MTN tax havens exposed

Mauritius for “intellectual property rights and know-how” and also for “technical expertise and back-office support” in some cases, according to MTN;

• Only about 45% of the management fees paid by MTN’s Africa and Middle Eastern operations “compensate MTN Dubai for the services provided by the company”, said MTN spokesperson Maroleng. He said MTN Dubai employs 115 people;

• MTN Mauritius has no staff, Maroleng confirmed, saying it is “effectively managed” from South Africa; and

• According to company documents, MTN relies on the management fees and other amounts paid to Mauritius to service international loans. “Excess cash” then flows from MTN Mauritius to South Africa as dividends.

After several rounds of questions, MTN confirmed that not all the management fees received by MTN Mauritius are used to reimburse the South African offices for services provided.

Maroleng said MTN Mauritius does pay some management fees to two South African companies: MTN International (Pty) Ltd and MTN Group Ltd, but he refused to say how much.

N e v e r t h e l e s s , MT N G r o u p ’ s accounts, which are publicly available, show it receives relatively tiny sums as management fees.

For example, in 2010, when MTN Mauritius received hundreds of millions of rands in management fees, only R58-million found its way to the MTN Group. It was not possible to establish what was paid to the other South African company.

The implication is that a large portion of MTN’s management

Photo: Delwyn Verasamy Cold call: MTN, whose head office is in the Johannesburg suburb of Fairland, denies that it has ‘actively engaged in any unlawful activities’.