MTN boss Sifiso Dabengwa has described claims of corruption against his company in Iran as "not worth the paper they're written on", as a multitude of new allegations of improper behaviour were levelled at the cellphone company.
In February, Turkcell lodged a $4.2-billion case against MTN in a Washington court, claiming the company had bribed numerous officials - including SA's former ambassador to Iran Yusuf Saloojee - to ensure it scored a lucrative cellular licence in Iran.
This week, MTN made headlines in Washington after it emerged that it paid $100000 in speaking fees to one of US President Barack Obama's senior advisers, David Plouffe. Critics suggested it was nothing less than a bribe.
This came on the heels of accusations by United Nations agencies that MTN's Liberian partners had acted as a front for former dictator Charles Taylor.
Dabengwa admitted it had been tricky to limit the reputational damage from the slew of accusations, specifically from Iran. "MTN is definitely not a corrupt company. We would never be involved in corrupt activities. Again, these are allegations of a specific individual," he said.
That individual is Chris Kilowan, former head of MTN's Iran business, who blew the whistle on bribery and corruption involving his former company in a deposition he gave in New York last month.
More damaging than Kilowan's evidence, however, were invoices that proved MTN paid $400000 to Aristo Oil, a front company for Iran deputy minister Javid Ghorbanoghli, and memos in which senior executives, including former CEO Phuthuma Nhleko and former head of Northern African and Middle East operations Irene Charnley, discussed "consultancy agreements".
Though Dabengwa said the allegations were flimsy, he could not say why MTN's internal Hoffmann commission had not released its findings, more than six months after being set up. He said the Hoffmann commission had to battle logistical difficulties, but would "hopefully have concluded" its work by the end of the year.
However, he said that if MTN did find evidence against Nhleko or Charnley, "we would be obliged to lodge" criminal complaints.
The half-year financials showed clearly how Iran had become a cornerstone of the company's business.
MTN clocked up revenue of R66.4-billion (up 17.5%), raising its pre-tax profit of R19.7-billion by 15.2%. MTN Irancell earned R2.9-billion during those six months - the third-most profitable region for the company after SA and Nigeria - thanks to its 38million subscribers in the country.
But Iran has brought more than its fair share of headaches for MTN. Dabengwa admitted that sanctions against Iran and Syria meant MTN was facing a nightmare in withdrawing its cash.
New court papers lodged by Turkcell in the US last week claim MTN seems to believe that "corruption and bribery are acceptable commercial strategies".
Referring to Kilowan's claim that MTN spied on Iranian citizens for the government, Turkcell said that MTN would probably "characterise its involvement in perpetrating human rights abuses by monitoring and disrupting cellphone communications by dissidents over its networks in Iran as mere 'phone bill disputes'".
Though MTN denied paying bribes, its legal strategy in Washington has been to argue that such a case should not be heard in the US.
However, Dabengwa said this week: "It doesn't matter which court they go to, and this is a personal view, they can say someone else did this, or someone else did that, but the reality is that the licence [was granted to them] with certain conditions, and they just did not accept those conditions."
Turkcell has responded by detailing numerous reasons for launching the case in the US, including the fact that MTN has numerous shareholders from that country.
"MTN's actions were immoral, illegal and damaged Turkcell . MTN advertises its products and services specifically to residents of the district of Columbia through an interactive website [and] sells airtime at thousands of locations in the country, including almost 20 storefront locations in the District of Columbia," it said.
The US media ran stories about the fallout for Obama relating to his aide accepting speaking fees.
The Washington Examiner focus ed on the "dullness" of Plouffe's two speeches, and said MTN must have paid R850000 for something other than Plouffe's oratory skills.
"But if MTN managed to secure itself a friendly ear in the Obama White House . . . then that six-figure payout might have been worth making," the paper said.
Although no US laws were breached in accepting the money, experts say the greatest electoral damage is another image of Obama's "otherness" in many voters' minds, with the two names least trusted by Americans - Iran and Nigeria - now linked to the president.
The White House hit back saying Obama's presidential opponent, governor Mitt Romney, was an investor with Turkcell when it was involved with Iran's government.
It was alleged that he "stood to benefit" if Turkcell won its lawsuit against MTN.
US lobby group United Against Nuclear Iran alleged in a statement that MTN "carried out orders from the regime to shut off text messaging and Skype during times of political protest, and reportedly has a floor in its Tehran headquarters where Iranian military officials compile and access tracking data."
The fallout took another turn on Wednesday, with media claims that MTN had approached the US government for assistance in getting its profits out of Iran.
Former ambassador Mark Wallace said in a statement: "It is of no surprise that MTN is having difficulties moving its profits out of Iran, given the international banking blockade emerging against the regime that MTN has chosen to ignore."
Post a comment