While mobile operator MTN Group made strong gains on the local stock exchange at the back end of last week, following the withdrawal by Turkcell of a $4.2 billion lawsuit against the group, the Turkish firm says it intends to re-file the case in another jurisdiction.
Shares in MTN advanced nearly R5.00 (R4.98), or 2.98%, to R171.98 by close of play on the JSE on Friday (3 May).
MTN has gained more than R10 already since the start of May, having started Wednesday (1 May) at R161.78. The group is well up on its 52 week worst level of R130.82, and will eye its best figure of R184.45.
Turkcell, on May 2, withdrew a US lawsuit before the US District Court of Columbia, over the awarding of Iran’s second mobile licence to MTN in 2005. The company had claimed that MTN had bribed its way to winning a mobile license in Iran that was first awarded to Turkcell.
The Turkish company said its decision to drop the case was based on the US Supreme Court’s decision to dismiss the Kiobel vs Royal Dutch Petroleum lawsuit, in a ruling which limited the jurisdictional reach of US courts under the Alien Tort Statute.
The Alien Tort Statute is a section of the US Code that reads: “The district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States.”
This statute is notable for allowing US courts to hear human-rights cases brought by foreign citizens for conduct committed outside the US.
Not over yet
Turkcell said in a statement on Wednesday:
“In light of the Kiobel ruling, Turkcell has voluntarily dismissed the matter, based only upon jurisdiction, without prejudice to the merits of the case and to re-file the case in another jurisdiction.”
MTN welcomed the decision. 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.
MTN moves on
Given its geographical spread, analysts believe the company will continue to deliver as an investment vehicle, albeit in the long term.
Late last month, the group said it is connecting approximately 195 million people in 22 countries in a quarterly update for the period ended March 2013.
Last month, MTN’s CEO told Reuters that the group could spend up to $8 billion on an acquisition and is looking for targets on the continent, the Middle East and Southeast Asia.
MTN is one of 12 groups shortlisted for a potentially lucrative telecoms licences for Myanmar, and has also been linked to a bid for a 53% stake in Maroc Telecom, currently held by France-based Vivendi S.A.
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