US court advises to dismiss case against MTN
MTN CLOSED stronger on the JSE yesterday after it said it was reducing debt and it emerged that a US court has advised the dismissal of a case accusing the telecoms company of aiding Islamist militant groups in Afghanistan.
MTN said yesterday that on Friday the magistrate judge to whom the case had been referred had recommended that the district judge presiding over the case grant a motion to dismiss for all defendants in the case, including as submitted by MTN defendants.
“The magistrate judge further concluded that the court did not have jurisdiction over MTN defendants. Under the US court’s procedures, the plaintiffs are permitted to file objections to the report with the district judge, and MTN defendants will have an opportunity to respond,” said MTN.
The group said it was in the process of studying the full report with its legal counsel.
“However, the company is pleased with this positive development supporting MTN’s strong defence and arguments with regards to its motion to dismiss. MTN conducts its business in a responsible and compliant manner in all its territories and will continue to defend its position where necessary,” said MTN in a trading update.
The civil case filed in 2019 on behalf of hundreds of US soldiers who were killed and injured in Afghanistan alleged that MTN and its subsidiaries, MTN Dubai and MTN Afghanistan, contravened the US Anti-Terrorism Act by paying the Taliban for protection and deactivated its cell towers.
In its response, MTN asked the court to dismiss the case, first because the court lacked jurisdiction over MTN defendants, which do not operate in the US, and second, the complaint does not allege any conduct by MTN defendants that violated the Anti-Terrorism Act.
MTN had allegedly shut down its towers and harboured anti-US motives in supporting the Taliban, according to the case.
MTN said yesterday it had made meaningful progress in strengthening its financial position, maintaining a healthy liquidity position and faster de-leveraging of the holding company’s balance sheet.
“This has been supported by upstreaming of approximately R9.3 billion in cash from its operating companies, including R4bn from MTN Nigeria, in the six months to June 30 this year. Post the period end, MTN has received a further R0.7bn in cash from Nigeria to date,” said MTN.
MTN said in the six months to the end of June it expected earnings per share to slump by up to 85 percent, or 573 cents, compared with earnings a share of 674c a year earlier.
The group said earnings a share included impairment losses of about 75c that related mainly to MTN Yemen, largely non-cash losses from the de-consolidation of subsidiary MTN Syria of about 262c, and a gain on the fair value uplift on the consolidation of the group’s equity accounted investment in aYo of 96c.
The group flagged a fall of up to 15 percent in headline earnings per share compared with 430c for the corresponding six-month period ended on June 30 last year.
MTN’s shares closed 5.59 percent higher at R111.30 on the JSE yesterday.