MTN shares yesterday crashed, wiping out some R30bn in shareholder value at one point, as investors digested the prospect of increased risk of a sizeable hit stemming from its venture in Iran.

This after Africa’s biggest mobile operator said it has been informed of a US Department of Justice grand jury investigation into the group’s conduct in Afghanistan and Iran. 

News24 reports that MTN is already facing civil lawsuits in the US, including from families of US soldiers who died in Afghanistan. They allege MTN paid protection money to al-Qaeda and the Taliban.

Turkish telecoms giant Turkcell is also pursuing a case against MTN in SA courts, arguing that MTN used bribery and corruption to edge it out of winning a stake in Iran’s first private cellphone licence.

MTN holds 49% in Irancell, the country’s largest mobile operator. It exited its Afghanistan business this year.

Yesterday, MTN CEO Ralph Mupita told a media briefing that the group had been informed through its external US counsel of the grand jury recently and was co-operating with requests for information.

Mupita said it was important to emphasise that MTN had not been accused of any wrongdoing. He said MTN has faced some ‘noise’ in the media related to the issue, and was, for example, being questioned about conduct in Iraq when it didn’t operate there.

‘So, a lot of these things are legacy, looking back, set of issues, and we obviously have to spend the time to defend ourselves ...,’ he said.

News of the US grand jury investigation comes at a sensitive time, with the US threatening ANC leaders with sanctions over their relationship with Iran.

In 2012, after losing out on Iran’s second cellphone licence, Turkcell filed a complaint in a US court alleging that MTN allegedly leveraged ‘high-level political influence within the SA Government’ to support Iran’s nuclear position at the International Atomic Energy Agency (IAEA).

The MTN chairperson at the time was President Cyril Ramaphosa, while MTN’s current chairperson is Mcebisi Jonas, SA’s special envoy to the US.

An independent investigation commissioned by MTN more than a decade ago, found no evidence supporting the bribery and IAEA claims.

‘Any suggestion that MTN has input into the foreign policy of SA is false and misleading,’ MTN said recently.

Analysts told News24 that interim results from MTN released yesterday were positive from a management perspective and also welcomed news of an executive shakeup aimed at boosting an SA unit struggling with intense competition, particularly in the pre-paid market.

First News24 report

Second News24 report