MTN has welcomed Turkcell’s withdrawal of its multi-billion dollar US lawsuit before the US District Court of Columbia, over the awarding of Iran’s second mobile licence to MTN in 2005, claiming that the Turkish operators decision was expected.
Shares in MTN were boosted by the news, gaining in excess of R4.00 in midday trade on the JSE, before falling back slightly.
By 15:20, shares in MTN moved 2.16% or R3.49 higher to R165.27 on the local exchange, still some way off its 52 week best level of R184.45.
An analyst at PSG Konsult said that, at $4.2 billion, “the decision must have come as a relief.” He added that MTN could put this saga to bed and continue with its current growth strategy.
MTN opposed Turkcell’s claim, which hinged on allegations of bribery, saying it lacked legal merit and that there was no basis for it to be brought before a US Court.
Turkcell withdrew the claim on Wednesday (1 May), following a ruling by the US Supreme Court in April restricting the ability of foreign corporations to bring before US courts cases alleging corporate misconduct that took place outside the United States.
MTN Group president and CEO, Sifiso Dabengwa said: “Turkcell’s decision to drop their claim was expected, however, we welcome it.”
After becoming aware of Turkcell’s claims in February last year, the MTN Board commissioned Lord Hoffmann to lead a thorough investigation into these allegations. Then in February this year, the committee led by Lord Hoffmann determined that Turkcell’s allegations were without foundation.
The committee concluded that they found nothing in the conduct of MTN that put at question MTN’s integrity or propriety during the period that Iran’s second mobile licence was awarded.
Dabengwa stressed that MTN has zero tolerance for corruption and unethical business, and constantly reviews its governance practices to ensure that its actions and those of its employees across its 22 markets are beyond question.
“Now that this case is behind us, we are forging ahead with great determination towards achieving MTN’s newly launched vision to deliver a bold new digital world to our customers,” Dabengwa said.