Hawks raid MTN offices in Turkcell dispute

Hawks raid MTN offices in Turkcell dispute

The Hawks have raided the offices of MTN Group and those of its external legal counsel, Webber Wentzel, apparently over the ongoing legal dispute with rival Turkcell, which lost out to the JSE-listed telecommunications operator to a lucrative operating licence in Iran in 2005.

The separate raids both took place on Friday, TechCentral has learnt.

It’s understood that the Hawks seized materials at both companies. Hawks spokesman Brigadier Hangwani Mulaudzi did not respond to a request for comment on why the police agency decided to conduct the raids.

In e-mailed response to questions from TechCentral on Tuesday, MTN confirmed that the Hawks raided its Fairland, Johannesburg head office.

“On 1 June, representatives from South Africa’s directorate for priority crime investigation (the Hawks) visited both MTN and its external legal counsel to obtain documents relating to aspects of the Turkcell litigation pursuant to MTN’s original self-reporting of this matter and the Turkcell complaint”.

MTN said it is “cooperating fully” with the Hawks’ investigation.

Webber Wentzel also confirmed to TechCentral that the Hawks raided its offices on Friday, though it declined to say whether the raid was related to MTN, saying it is prevented professionally from providing any third party with information related to client matters.

“Webber Wentzel can, however, confirm that the Hawks arrived at its Johannesburg office on 1 June with a warrant to seize documents related to a client involved in ongoing commercial litigation,” it said.

The law firm said it is reviewing the lawfulness of the warrant as well as its execution by the Hawks “on several grounds, including legal privilege”.

“Webber Wentzel ensured that the documents and information taken were sealed and will be kept by an independent third party, nominated by Webber Wentzel, pending the outcome of an application to the high court,” it said. “Webber Wentzel will ensure that its client’s rights are protected and that legal privilege, which is a key principle of the legal profession, is upheld.”

$4.2bn lawsuit

MTN Group last year moved to have Turkcell’s US$4.2bn (R53.3bn) lawsuit against it thrown out by the high court in South Africa, arguing, among other things, that several previous attempts by its rival, in other forums, to seek redress against the Johannesburg-based mobile operator had failed.

MTN said it did nothing wrong in securing an operating licence in Iran.

The dispute between the companies dates to 2005. Over the years, Turkcell has accused MTN of paying bribes to secure the Iran licence. MTN owns 49% of MTN Irancell, that country’s second mobile network operator. Turkcell claimed it lost out to MTN after the latter paid bribes and other inducements to secure the lucrative stake, charges which MTN has refuted. Iran is one of MTN’s most important markets, alongside Nigeria and South Africa.

Turkcell’s legal challenge comes despite the findings in 2013 of the Hoffmann Committee, appointed by MTN in 2012, which cleared the South African group of wrongdoing in Iran. That committee, chaired by South African-born former senior British jurist Leonard Hoffmann, found there was no conspiracy between MTN and Iranian officials to remove Turkcell from the bidding process. Indeed, the committee found that Turkcell’s allegations were a “fabric of lies, distortions and inventions”.Previous attempts by Turkcell to resolve the matter through international arbitration failed. The company approached the South African courts after a legislative change affected the jurisdiction of a US court from which it had earlier sought relief. It alleged in its application to that court that MTN had conspired with Iranian officials to oust it from the successful consortium that bid for the licence and take its place by promising to use its influence with the South African government so it could procure defence equipment and garner support for its nuclear development programme at meetings of the International Atomic Energy Agency.

On Tuesday, MTN said it “remains of the view that Turkcell’s claim is opportunistic, an abuse of the process of court, baseless and without merit”. It said it has provided the Hawks with a full copy of the Hoffman report, together with detailed annexures.

Update: MTN’s share price fell sharply after TechCentral broke the news about the raid on its head office, but recovered some ground later in the day. After falling to R114.02/share, it was trading 2.4% down at R116.01/share at 4.13pm on Tuesday.

Source:  NewsCentral Media



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