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MTN to face another court battle with Turkcell

Business Report
Turkcell, Turkey’s biggest telecommunications firm, based in Istanbul said on Wednesday that after years of delay its $4.2billion (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 chairpersonPhuthuma 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.

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Picture: ReutersTurkcell headquarters in the centre of Istanbul, Turkey. Turkcell is seeking $4.2 billion in a law suit from MTN. Photo: Bloomberg

The $4.2billion 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.


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

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