MTN says probe dismisses corruption allegations

Fri Feb 1, 2013 9:42am EST
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By Helen Nyambura-Mwaura

JOHANNESBURG (Reuters) - An external committee appointed by African mobile phone group MTN to investigate claims by rival Turkcell of corrupt dealings in Iran has dismissed the allegations as "a fabric of lies, distortions and inventions".

The committee, chaired by retired British judge Lord Hoffmann, also found nothing to support claims that MTN had promised to get the South African government to supply Iran with defense equipment in exchange for a telecoms operating license.

MTN and its local partners won a lucrative license in 2005 to launch a new Iranian mobile-phone carrier, but the deal became embroiled in controversy when Turkcell filed a $4.2 billion lawsuit in the United States last year.

"Following a critical examination of the evidence, the Hoffmann Committee found that Turkcell's allegations are 'a fabric of lies, distortions and inventions'," MTN said in a filing to the Johannesburg Stock Exchange on Friday.

Turkcell declined to comment.

The Turkish telecoms company's allegations come against the backdrop of the Western world's forceful economic sanctions designed to deter Iran from pursuing its nuclear development program.

Turkcell claims that MTN won the Iran contract by offering to use its influence in Pretoria to help Tehran to obtain military hardware and sway South Africa's votes at the International Atomic Energy Agency.

Backed by a collection of alleged MTN internal documents including emails, invoices, memos and presentations, Turkcell's lawsuit accuses the South African company of a "staggeringly brazen orchestra of corruption".   Continued...

The logo of South Africa's MTN Group is seen on signage outside the company's headquarters in Johannesburg, May 27, 2008. REUTERS/Mike Hutchings