South African court to hear Turkcell's Iran licence bribery lawsuit against MTN

South African court to hear Turkcell's Iran licence bribery lawsuit against MTN
Turkcell alleges that bribery was behind the switching of the Iran licence to MTN, something the South African operator refutes.
By bne IntelliNews June 2, 2017

Turkish mobile operator Turkcell’s lawsuit against South African GSM operator MTN, pursuing damages resulting from alleged bribery conducted by MTN during the tender process for Iran's first private GSM licence back in 2004, has been accepted by the South Gauteng High Court in Johannesburg, Turkcell's lawyer in South Africa, Eric van den Berg, told Reuters on June 1.

The trial could be held towards the end of 2018, according to van den Berg. Turkcell is suing Johannesburg-listed MTN for the sum of profits, plus interest, that it claims it would have accrued if the licence had not been taken away from it and given to its rival.

“We believe we have a very strong claim,” the Financial Times reported Serhat Demir, Turkcell’s executive vice president for legal and regulatory affairs, as saying on June 1. “Turkcell will be seeking the earliest possible trial date, and looks forward to vindicating its claims before the South African courts,” he reportedly added. The newspaper also reported Johannesburg-listed MTN as saying there was no legal merit to Turkcell's claim and that the company would oppose it.

In 2004, Turkcell was awarded Iran's first private GSM licence through an international tender, but it was later barred from concluding the respective agreement and Iran instead entered into a licence agreement with MTN.

In March 2012, Turkcell filed a $4.2bn lawsuit against MTN, Africa's biggest mobile carrier by sales, in a US court. In July 2012, MTN appealed to the US federal court to dismiss the bribery suit filed by Turkcell over the Irancell deal, saying the US court lacked jurisdiction over the matter.

In November 2013, Turkcell filed a new lawsuit at the Johannesburg court, claiming that it had obtained new information suggesting that the signing of the licence agreement with MTN instead of Turkcell was a consequence of bribery undertaken by MTN.

Turkcell's share price was down 0.16% d/d to TRY12.14 at closing prices on June 1, while the benchmark BIST-100 had moved down 0.18% to 97,366.

Turkcell Financials (consolidated)
(mn TRY) end-14 end-15 15/16 end-16 16/17
Total Assets 23,668 26,184 11% 31,600 21%
Total Equity 16,689 14,399 -14% 16,068 12%
(mn TRY) 2014 2015 15/16 2016 16/17
Revenues 12,044 12,769 6% 14,101 10%
Gross Margin 4,663 5,003 7% 5,067 1%
Operating Income 3,179 3,401 7% 3,451 1%
Net Income 1,867 2,070 11% 1,512 -27%
source: kap

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