Turk­cell case against MTN goes to court

The Star Early Edition - - BUSINESS REPORT - Di­neo Faku

TURK­CELL, Turkey’s big­gest telecom­mu­ni­ca­tions firm, based in Is­tan­bul said on Wed­nes­day that af­ter years of de­lay its $4.2 bil­lion (R55.06bn) law­suit against cel­lu­lar gi­ant MTN Group would fi­nally be heard in the South Gaut­eng High Court.

Ser­hat Demir, Turk­cell’s le­gal and reg­u­la­tion ex­ec­u­tive vice pres­i­dent said yes­ter­day that the com­pany had a very strong claim. The claim is against MTN, its sub­sidiaries, its chair­per­son P hut hum a Nh­leko who was chief ex­ec­u­tive at the time of the trans­ac­tion and for­mer MTN di­rec­tor, Irene Charn­ley.

“The South African courts will be able to eval­u­ate the huge amount of ev­i­dence we have to sup­port our claim that MTN went to ex­tra­or­di­nary lengths to un­law­fully take Turk­cell’s rights to the Ira­nian GSM (Global Sys­tem for Mo­bile) li­cence,” Demir said. Demir also said that Turk­cell was seek­ing the ear­li­est pos­si­ble trial date.

The $4.2 bil­lion claim against MTN was cal­cu­lated from prof­its the com­pany would have made had it op­er­ated the li­cence it was fully awarded, he ex­plained. Turk­cell was also claim­ing in­ter­est on the amount since 2005.

For more than 10 years Turk­cell has al­leged that MTN had been un­law­fully awarded a ten­der to pro­vide telecom­mu­ni­ca­tion ser­vices in Iran through pay­ing bribes to of­fi­cials. It had been named the win­ning bid­der in Fe­bru­ary 2004 and MTN had come sec­ond. How­ever, the de­ci­sion was re­versed in 2005 and since then MTN has op­er­ated the li­cence as MTN Iran­cell.

Turk­cell said yes­ter­day that the le­gal process in South Africa would now move ahead af­ter the High Court judg­ment re­ject­ing all of MTN’s lat­est ob­jec­tions.

Turk­cell first lodged the claim in the South Gaut­eng High Court in 2013, but it was de­layed by ob­jec­tions from MTN. How­ever, last month the court re­jected nearly 30 fur­ther ob­jec­tions from MTN. MTN had un­til May 30 to ap­peal for leave to ap­peal against the judg­ment, but it did not do so, Turk­cell said. In court pa­pers Turk­cell has al­leged that MTN had a sec­ond se­cret ten­der bid­ding process af­ter it lost the ten­der.

It also said that from March 2004 MTN rep­re­sen­ta­tives reg­u­larly trav­elled be­tween Jo­han­nes­burg and Iran to es­tab­lish re­la­tion­ships be­tween them and in­flu­en­tial in­di­vid­u­als.

The aim was to utilise ex­ist­ing re­la­tion­ships which MTN had at the time with South Africa’s Min­is­ter of De­fence and the am­bas­sador to Iran.

Turk­cell also al­leged in court pa­pers that the cor­rupt acts in­cluded “MTN promis­ing to in­flu­ence the South African gov­ern­ment with re­gard to the man­ner in which South Africa would vote in Iran’s nu­clear pro­gramme at the In­ter­na­tional Atomic En­ergy Agency”.

MTN said yes­ter­day that it con­tin­ued to be­lieve that there was no le­gal merit to Turk­cell’s claim and would ac­cord­ingly op­pose it. “The law­suit cur­rently be­fore the courts is not a new ac­tion and arises from a claim that was lodged in 2013, re­lat­ing to Turk­cell’s al­leged griev­ances aris­ing from its un­suc­cess­ful bid to ob­tain a mo­bile li­cence in Iran, and the award­ing of that li­cence to Iran­cell,” it said. The com­pany said that the re­cent de­vel­op­ments in the mat­ter were pro­ce­dural in na­ture and had noth­ing to do with the mer­its of the case. MTN was slapped with a hefty $5bn fine for mi­s­is­ing a dead­line to dis­con­nect un­reg­is­tered SIM cards in Nige­ria.

MTN shares de­clined 1.06 per­cent on the JSE yes­ter­day to close at R116.25.


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