An internal enquiry, the Hoffman Committee, has cleared MTN of wrongdoing in the ongoing Turkcell case. This is according to a statement issued by MTN on Friday.
In February last year, Turkcell Iletisim Hizmetleri (Turkcell) and its subsidiary, East Asian Consortium (EAC), instituted a claim against MTN and its subsidiary, MTN International (Mauritius) in the US District Court in Washington DC arising out of EAC’s unsuccessful effort to obtain the second GSM Licence in Iran during 2005.
Turkcell alleged that MTN had conspired with Iranian officials to oust Turkcell from the successful consortium and take its place by:
* Promising to use its influence with the South African government to procure the supply of defence equipment to Iran and to support the Iranian nuclear development programme at meetings of the International Atomic Energy Agency (IAEA);
* Bribing two Iranian public bodies (Sairan and the Bonyad) with payments disguised as sham loans;
* Bribing the then South African ambassador to Iran, Yusuf Saloojee, with a payment of $200 000; and
* Bribing an Iranian official, Javid Ghorbanoghli, with a payment of $400 000 to a company called Aristo Oil.
These claims were based on the allegations of Christian Kilowan, a former employee of the MTN group, who was involved in its operations in Iran from August 2004 to November 2007.
At that time, the MTN board stated its belief that the claims in the US Proceedings lacked legal merit and launched a motion to dismiss the claims.
However, in the light of the serious nature of the factual allegations and the company’s zero tolerance for corruption, the MTN Board established a special committee (Hoffmann Committee) consisting of an external chairman and non-executive directors to take all actions the committee deemed appropriate to investigate the Turkcell allegations.
The board appointed Lord Leonard Hoffmann, an international jurist and former UK House of Lords judge, as the chairman.
According to the new statement, the Hoffmann Committee undertook a thorough examination of Turkcell’s allegations, which included an extensive collection and review of electronic and documentary records, including those relied on by Turkcell, and a consideration of all available evidence, including the evidence of current and former MTN employees as well as current and former South African and Iranian officials, the testimony of Kilowan in the US Proceedings and several expert reports commissioned by the Hoffmann Committee.
Following this year long investigation, the Hoffmann Committee has reported its findings to the MTN Board. The report runs to some 193 pages, together with over 500 pages of appendices, and addresses Turkcell’s allegations in detail.
In summary, the key findings of the Hoffmann Committee are that:
* There was no conspiracy between MTN and Iranian officials to remove Turkcell from the successful consortium;
* There was no promise on the part of MTN to get the South African government to supply defence equipment to Iran or to support Iran’s nuclear policy at the IAEA;
* There were no sham loans to Sairan and the Bonyad;
* MTN paid nothing to Ambassador Saloojee and neither Phuthuma Nhleko, the then CEO of MTN, nor Irene Charnley (until March 2007 the MTN director with responsibility for Iran) authorised Kilowan to promise him anything;
* Neither Nhleko nor Charnley approved a payment which they knew to be intended for Ghorbanoghli. On 4 April 2007 a subsidiary of MTN made a payment of $400 000 into the personal account of a Mousa Hosseinzadeh, a business partner of Kilowan who had been introduced to him by Ghorbanoghli.
The Hoffmann Committee determined that the evidence of both Kilowan and Hosseinzadeh was unreliable, and was thus unable to determine what happened to this money.
The payment was made on an invoice from Aristo Oil International Limited, of which Hosseinzadeh is a director, for consultancy services, apparently countersigned by Nhleko, but the Hoffmann Committee found that there is evidence (including expert handwriting analysis) to suggest that Nhleko’s signature was a forgery; and
* Consequently, the allegations made by Turkcell against Nhleko, Charnley and members of the MTN board and senior management, including the chairman, Cyril Ramaphosa, and the current CEO, Sifiso Dabengwa, who were all alleged to be complicit in the actions of Nhleko and Charnley, are false.
In reaching these findings, following a critical examination of the evidence, the Hoffmann Committee found that Turkcell’s allegations are “a fabric of lies, distortions and inventions”, according to the MTN statement.
MTN will continue to defend the US proceedings.