The Wall Street Journal, Johannesburg, 3 Feb 2012 – Shares of South Africa’s MTN Group Ltd. fell Friday after the company said it is investigating bribery claims from Turkey’s largest mobile phone operator regarding its business in Iran.
The allegations are the latest troubles for MTN and its Iranian operation. The company is currently the target of a U.S. lobby group that is seeking to get foreign businesses to pull out of Iran.
MTN has a 49% stake in Iran’s No. 2 mobile phone operator, with the government as its partner. MTN derives 21% of its subscriber base from Iran, according to its most recent figures.
MTN Chairman Cyril Ramaphosa said late Thursday the company’s board of directors was setting up a special committee to investigate allegations made by Turkey’s Turkcell Iletisim Hizmetlera AS.
According to MTN, Turkcell alleges that the South African company encouraged its government to support Iran’s nuclear power development program in 2005 and that MTN made improper payments to an Iranian and a South African government official between 2004 and 2005, to enable the company to secure a license to operate in Iran.
Turkcell declined to comment Friday and South Africa’s Department of International Relations and Cooperation said the government said it wouldn’t be ‘dragged’ into the issue, which it said is between the two companies.
Turkcell lost out to MTN in 2005 for the second license for a foreign operator in Iran. Since then the Turkish company has brought different cases against Iran’s government, one which is still pending, claiming Iran violated a shareholders agreement.
At 0945 GMT, MTN shares were down 4.58 rand, or 3.3%, at 133.71 rand.