MTN
MTN
MTN - MTN Group Limited - Announcement by MTN Group Ltd
MTN Group Limited
(Incorporated in the Republic of South Africa)
Registration number 1994/009584/06
Share code: MTN
ISIN code: ZAE000042164
("MTN")
Announcement by MTN Group Ltd
Potential legal action by Turkcell Iletisim Hizmetlera AS
Shareholders will be aware that MTN, through one of its subsidiaries, owns a
49% shareholding in Irancell, which holds the second GSM telecommunications
licence in Iran (2nd GSM Licence). The remaining 51% of Irancell is owned
and controlled by Iran Electronic Development Company (IEDC).
By way of background, Turkcell Iletisim Hizmetlera AS (Turkcell) and its
subsidiary, East Asian Consortium (EAC), have brought a variety of legal
proceedings arising out of EAC`s unsuccessful effort to obtain the 2nd GSM
Licence in 2005. In late 2005, EAC commenced (ultimately unsuccessful)
proceedings against the Iranian Ministry of Telecommunications. In 2008,
Turkcell instituted (currently pending) international arbitration
proceedings against the Iranian government under a bilateral investment
treaty.
Turkcell has informed MTN that it believes it has a claim against MTN and
its relevant subsidiary, arising out of the award of the 2nd GSM Licence,
based on alleged violations of United States laws (the Turkcell US Claim),
and has indicated an intention to bring such a claim before a United States
court. No such claim has been filed or served.
As MTN understands the Turkcell US Claim, it would allege that, in
approximately 2004 to 2005, in an effort to cause the Iranian government to
issue the 2nd GSM Licence to MTN rather than Turkcell, MTN made improper
payments to an Iranian and a South African government official; that MTN
encouraged the South African government to take a favourable position toward
Iran`s civil nuclear power development programme at a meeting of the
International Atomic Energy Agency in November 2005; and that MTN enlisted
South African government support for the provision of military equipment to
Iran. Turkcell has intimated a range of putative claim amounts, the nominal
value of which, if formally asserted, would be material. No basis for any
such claim amount has been substantiated to date. The MTN Board of
Directors, on legal advice, presently believes that the Turkcell US Claim
lacks legal merit, and that, in any event, a US court would not have
jurisdiction to entertain the claim.
MTN has zero tolerance for corruption and unethical business practices.
Accordingly, the Board of Directors has established a special committee
consisting of non-executive directors to consider the allegations made in
support of the Turkcell US Claim. The Board has appointed Lord Leonard
Hoffmann, an internationally renowned jurist, to chair the committee, to
oversee and validate its investigation, and to ensure the integrity and
independence of the investigation. The Board has directed the committee to
take all actions it deems appropriate to investigate the allegations, and to
make recommendations to the Board as to any actions to be taken as a result
of its findings, including as to publication of such findings and any
measures which may be warranted.
Fairland
2 February 2012
Sponsor
Deutsche Securities (SA) (Pty) Limited
Date: 02/02/2012 17:45:01 Produced by the JSE SENS Department.
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