Africa's largest cellular company, MTN, saw its shares close 1.66% down on Friday, after the company announced late on Thursday that it faced possible legal action over its Iran operation.
The stock lost 230c, to close at R135.99 on Friday. Its 52-week high is R146.94, which it hit on 5 July last year, while its 52-week low is R119.69, which it closed at on 24 February last year.
MTN said late on Thursday that Turkish operator Turkcell told the company that it believes it may have a claim against the African operator, and will be filing a case in a US court. The claim is against MTN and one of its subsidiaries over a GSM licence in Iran.
The JSE-listed operator has a 49% stake in Irancell through one of its subsidiaries. Irancell, which has the second GSM licence in Iran, is 51%-owned and controlled by Iran Electronic Development Company.
MTN's Iran operation accounted for 33 million of its 158.6 million subscribers at the end of September last year.
Turkcell alleges that, in 2004/5, MTN “made improper payments to an Iranian and a South African government official” in a bid to secure the licence in Iran, says MTN's statement.
The Turkish operator also alleges that “MTN encouraged the South African government to take a favourable position toward Iran's civil nuclear power development programme at a meeting of the International Atomic Energy Agency in November 2005”, and that MTN enlisted South African government support for the provision of military equipment to Iran.
In a separate statement, MTN chairman Cyril Ramaphosa said “irrespective of the validity of Turkcell's claims, the very fact that such allegations have been made is serious”.
Ramaphosa said: “MTN has zero tolerance for corrupt and unethical business practices.” The company has set up a special committee to investigate the allegations, which will be chaired by local-born justice Lord Leonard Hoffman.
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