Stock in MTN - Africa's largest cellular company - gained 3.23% yesterday, after news that Turkcell had dropped its $4.2 billion lawsuit against the operator.
The news sent MTN's shares 522c higher, to close at R167 yesterday, on a day that the JSE's all-share index moved 0.9% higher. MTN's 52-week high is R183.67, which the share hit on 5 February, and its 52-week low was R130.95, on 23 May last year.
The legal action hinged on allegations of corruption against MTN in its bid to secure Iran's second mobile licence in 2005. Turkcell lost out in the bid to MTN.
Turkcell accused MTN of bribing both South African and Iranian officials, as well as soliciting the provision of weapons by SA to Iran, to acquire the licence. Turkcell alleged, in court papers, that MTN tried to influence SA's policy on Iran's nuclear programme.
Turkcell filed the $4.2 billion lawsuit against MTN in the US district court in Washington last March. However, its bid had a setback in April when the US Supreme Court limited the ability of human rights plaintiffs to invoke a 224-year-old law, limiting foreign companies' ability to approach the US for relief in actions without sufficient connections to the US.
The federal court had postponed its decision on the Turkcell suit as it waited for the outcome of the Supreme Court ruling on the use of the Alien Tort Statute. According to Reuters, Turkcell dropped its bid this week, citing the Supreme Court ruling.
In February, MTN's board appointed a committee to investigate the allegations made by Turkcell, which was chaired by an independent jurist, Lord Leonard Hoffmann. This February, the committee determined that Turkcell's allegations did not have any foundation, MTN said in a statement.
The committee found nothing around MTN's conduct "that put at question MTN's integrity or propriety during the period that Iran's second mobile licence was awarded", the operator stressed.
MTN had opposed Turkcell's claim, saying it lacked legal merit and there was no basis for it to be brought before a US court.
Yesterday, MTN CEO and president Sifiso Dabengwa said: "Turkcell's decision to drop their claim was expected; however, we welcome it."
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