MTN to face tax fraud charges in Uganda

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Reuters

A customer leaves an MTN shop in Johannesburg.

South African telecoms group MTN's chief executive and other senior managers have been summoned by a Ugandan court to face tax fraud charges, according to a document seen by Reuters on Tuesday.

MTN Uganda, the largest operator in the east African country, has previously denied the charges, saying they were initiated by a former employee sacked on allegations of theft.

CEO Sifiso Dabengwa and 12 officials including the chairman and CEO of MTN's Ugandan unit must appear in court on December 12 when they will also face charges of tax evasion, conspiracy to make false customs declarations and conspiracy to evade taxes, according to a November 7 summons issued by the Buganda Road Court.

MTN's website says a former worker, Naphtal Were, initiated the charges. Its statement also said an internal investigation and another by police implicated Were in the loss of 13 billion shillings ($5.0 million).

Were, whose lawyer was not available to comment, has since been sued by MTN for embezzlement.

He initiated the case against the company as a private prosecution last month but a court ruled on November 6 the public prosecutor should take it over.

Ugandan laws permit a person to start private criminal proceedings against another, with the public prosecutor having the a right to take over any such case.

“It should be noted that the private prosecution ... was brought against the MTN global chief executive and the board ... Customs declarations are made by clearing agents, and not by the MTN global chief executive or the MTN board,” MTN said.

MTN, the market leader in the region's third-largest economy since it entered Uganda in 1998, faces rising competition from other players including Airtel Uganda - owned by Indian company Bharti Airtel, and Warid Uganda - owned by Indian group Essar. - Reuters


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