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Turkcell not backing down from R59bn MTN lawsuit

Paula Gilbert
By Paula Gilbert, ITWeb telecoms editor.
Johannesburg, 01 Nov 2017
Turkcell first sued MTN in a US court in 2012, but later withdrew the case and filed in SA in 2013.
Turkcell first sued MTN in a US court in 2012, but later withdrew the case and filed in SA in 2013.

Turkcell says it is confident MTN's latest legal move will not stop its $4.2 billion (R59 billion) lawsuit against the Johannesburg-based operator.

On Monday, MTN filed a plea asking the court to dismiss the case, in a legal battle spanning more than five years.

"While the MTN pleas assert a variety of expected and meritless technical legal defences, Turkcell is confident they will be rejected by the court, and that the case can now be scheduled for trial in the coming months," Turkcell says in a statement.

The Turkish mobile operator first sued Johannesburg-based MTN in a US court in 2012, alleging MTN unlawfully secured an Iranian GSM licence that had been won by Turkcell in 2005. It claims MTN used bribery and corruption to overturn the initial Iranian decision so that the licence was awarded to Irancell, of which the MTN group owns 49%.

The case was later withdrawn from US courts and filed in SA 2013, where it has been caught up in legal wrangling ever since. In June, the legal battle resurfaced once again with news that the lawsuit was heading for the South Gauteng High Court. However, MTN group chief legal counsel Michael Fleischer told ITWeb yesterday that he believes the matter will only be heard in late 2018 or early 2019.

Turkcell says it is in fact pleased to report continued progress in the long-running litigation against the MTN group, and its former executives in SA.

"After years of attempting to delay the case, MTN and certain of the defendants have finally filed pleas responding to the allegations of Turkcell's particulars," it says.

The Turkish operator also claims "MTN finally admits to many of the allegations asserted by Turkcell that form the basis of its claims".

"Today's events are a positive step forward in our case," said Turkcell's executive VP for legal and regulation, Serhat Demir, "and MTN's admissions are confirmation of our claims. We look forward to bringing the facts and the testimony before the court at trial to prove our case in full."

MTN, however, continues to deny all allegations, calling Turkcell's claim "opportunistic" as well as "an abuse of the process of court, baseless and without merit".

"Turkcell continues to pursue its claims only to harass and oppress MTN. We consider that it is most unjust to burden MTN with a fifth round of litigation of substantially the same matters," MTN said in a statement yesterday.

"Turkcell's four previous attempts, including proceedings before reputable international arbitration panels, failed. The ongoing attempt to re-litigate complaints that Turkcell have repeatedly litigated without success are contrary to the interests of justice.

"We have every confidence this fifth 'bite at the cherry' will also fail. The claim smacks of a desperate last measure to try and extract benefits to which it is not entitled," MTN added.

The $4.2 billion claim against MTN is calculated from the profit Turkcell says it would have made had it operated the Irancell licence. Turkcell is also claiming interest on that amount, from 2005. The claim is made against the MTN group and various MTN companies, as well as Phuthuma Nhleko, MTN's non-executive chairman who was CEO at the time of the Irancell transaction, and former MTN director Irene Charnley.

JSE-listed MTN operates in 22 countries in Africa and the Middle East, including Iran. As of 30 June, it had 232 million subscribers across its operations.

The Turkcell group operates in nine countries - Turkey, Ukraine, Belarus, Northern Cyprus, Germany, Azerbaijan, Kazakhstan, Georgia and Moldova - and is listed on both the New York Stock Exchange and the Borsa Istanbul.

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