Johannesburg - The troubles stemming from Turkcell’s allegations of bribery and corruption in Iran against MTN are not going away. Yesterday the Directorate for Priority Crime Investigation, known as the Hawks, confirmed that it was continuing an investigation into the allegations – despite MTN’s internal probe finding the company to be innocent of any wrongdoing in the Middle East.
MTN did not previously disclose that the investigation was continuing. The cellular network giant also neglected to raise this at the presentation last week of its financial results for the six months to June.
Paul Ramaloko, a spokesman for the Hawks, confirmed that the investigation was continuing, but could not comment on the progress.
This latest development is bound to raise questions about whether there is a link between the abrupt departure last month of Nazir Patel, the former group chief financial officer, and the ongoing probe.
MTN said his departure revolved around “allegations of a governance nature”. The Business Times reported that Patel flouted procedures in diverting money out of Iran. The Business Times articles did not disclose who its sources were.
Ramoloko dismissed the link and declined to comment on whether Patel had been interviewed by the Hawks. “I don’t know. Even though he may be one of the people we’ve interviewed, I cannot say.”
MTN did not respond to enquiries by the time of going to press.
In May, MTN said it welcomed the dropping of the $4.2 billion (R42.3bn at yesterday’s rate) case in the US by Turkcell, which said it would seek another jurisdiction to try the matter, after a US court ruled that foreign cases could no longer be tried in American courts under the Alien Tort law.
But if MTN knew that the Hawks were continuing to investigate, market commentators said, it ought to have disclosed that fact.
The news of the ongoing probe piles more pressure on to MTN, which finds itself confronted by executive resignations, management reshuffles, executive suspensions and poor performance in South Africa.
“MTN has definitely hit a rough patch of late,” shareholder activist Theo Botha said, adding that the company appeared to be struggling to deal with reputational risk.
Gavin Price, a senior lecturer at the Gordon Institute of Business Science, said there was a moral and ethical obligation to disclose the continued investigation in the interests of investors who needed to make a decision on the firm. “Even if they were exonerated in an earlier investigation they can still play open cards and explain themselves,” he added.
Even with all this, MTN remains one of the most valuable brands in the world and its aggressive expansion has made it Africa’s largest cellular network operator.
David Maynier, the DA spokesman on defence, asked the Hawks in March last year to investigate issues around Iran.
On June 4 last year, the head of the Hawks, Lieutenant General Anwa Dramat, confirmed to the DA that the team was investigating the allegations formally.
Maynier said yesterday that he was “pleased” the investigation was continuing.
Turkcell, a Turkish cellular network operator, lost the bid for a telecoms operating licence in Iran to MTN in 2005. It accused MTN of, among other things, paying $400 000 to Iran’s former deputy foreign minister Javid Ghorbanoghli for assisting in securing the licence, and $200 000 to former South African ambassador to Iran Yusuf Saloojee to assist with delivering a pro-Iran position at the International Atomic Energy Agency.
MTN also financed a trip by Iran’s nuclear negotiator chief Hassan Rohani to meet former president Thabo Mbeki to discuss South Africa’s official position on Iran’s nuclear programme, Turkcell claimed. - Business Report