MTN faces setback as South African Court greenlights Iran bribery case
South Africa’s highest appeal court has ruled that a Turkish telecoms group claiming MTN bribed Iranian officials for a lucrative mobile phone licence may proceed with its case.
The Supreme Court of Appeal has overturned a 2022 High Court ruling that dismissed Turkcell and its subsidiary, East Asian Consortium’s, $4.2 billion damages claim.
MTN, which has consistently maintained that the Turkish mobile phone operator’s allegations are without merit, has announced its intention to appeal to the Constitutional Court.
The legal battle between the two companies dates back to the early 2000s, when MTN and Turkcell competed for a telecommunications licence in Iran.
The licence was awarded to Irancell, a consortium in which MTN holds a 49 per cent stake. Turkcell has long alleged that the African telecoms group, headquartered in Johannesburg, engaged in bribery and improper dealings to secure the licence—claims that have been consistently denied.
The dispute has played out in multiple jurisdictions. Turkcell initially filed a lawsuit in the United States but later withdrew the case and pursued legal action in South Africa.
In 2013, Turkcell and its subsidiary, East Asian Consortium (EAC), sued MTN in the High Court of South Africa, seeking billions in damages for lost business opportunities.
The case was initially dismissed in 2022, when the court ruled that South African courts did not have jurisdiction. This week’s decision has overturned that ruling.
MTN has reiterated that the Turkish mobile phone operator’s allegations are without merit and has confirmed its intention to appeal to South Africa’s highest court, the Constitutional Court.
Strategic MTN partners at risk
This week, a US terrorism law expert warned that MTN’s strategic partners could face legal challenges under the United States Anti-Terrorism Act (ATA), potentially carrying serious implications for those partnerships.
Professor Jeffrey Breinholt, a former senior official at the US Department of Justice, argued that MTN’s partners — including reputable firms such as Deloitte and Accenture — may come under legal scrutiny if the telecoms company’s involvement in operations in Iran is deemed substantial.
The MTN Group has also been scrutinised for the quality of its disclosure regarding US terrorism litigation in its latest annual financial statements.
In statements released this year, MTN described the five ATA cases in the US as having been assessed as ‘remote’; therefore, no contingent liabilities were disclosed.
The decision by the Appeal Court has prompted further scrutiny of MTN Chair Mcebisi Jonas, who was selected by President Cyril Ramaphosa to serve as a new envoy to Washington. Given the renewed attention on MTN’s connections to Irancell, questions have arisen about his suitability for the position.
