Turkcell sues MTN in South Africa for $4.2 billion in Iran damages

Wed Nov 27, 2013 11:06am EST
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By David Dolan and Ed Cropley

JOHANNESBURG (Reuters) - Turkish mobile phone company Turkcell has taken to a South African court with its $4.2 billion lawsuit against rival MTN Group, alleging it was the victim of corruption and bribery that caused it to lose a contract in Iran.

Turkcell originally pursued the case against Johannesburg-based MTN in the United States but dropped it in May after a U.S. Supreme Court ruling in a separate case made clear that U.S. courts would not have jurisdiction in a claim involving two foreign firms in an overseas dispute.

In papers filed on Tuesday with the South Gauteng High Court in Johannesburg and seen by Reuters, Turkcell says that MTN, former CEO and current Chairman Phuthuma Nhleko and former executive Irene Charnley "acted wrongfully" and interfered with Turkcell's relationship with the Iranian government over the granting of a mobile license in 2005.

Turkcell accuses Africa's largest mobile operator of "corrupt acts" - including promises of bribes and the giving of gifts to Iranian and South African government officials - to secure the license.

It also alleges that MTN promised to influence the South African government's vote at the International Atomic Energy Agency (IAEA) on Iran's nuclear program in 2005 and 2006.

MTN said in a statement: "Although we don't have details of the case, MTN continues to believe that there is no legal merit to Turkcell's claim and will accordingly oppose it."

Reuters was unable to reach Nhleko or Charnley for comment.

MTN has previously rejected the allegations and appointed a retired British judge to lead an investigation that dismissed the accusations as "a fabric of lies, distortions and inventions".   Continued...

A man walks past the Turkcell head office in Istanbul May 14, 2009. REUTERS/Osman Orsal