Ex-MTN CEO Denies Bribery Allegations Against Company

Date : 04/01/2012 @ 1:45PM
Source : Dow Jones News
Stock : Turkcell Iletisim Hizmetleri As (TKC)
Quote : 10.09  -0.28 (-2.70%) @ 4:02PM

Ex-MTN CEO Denies Bribery Allegations Against Company

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A former chief executive of South Africa's MTN Group Ltd. (MTNOY, MTN.JO) Sunday denied allegations that the telecommunications company bribed officials to get access to a license in Iran.

Turkey's largest mobile-phone operator last week filed suit against MTN, seeking $4.2 billion in damages related to losing out to MTN for the license to operate in Iran.

In a suit filed in the U.S., Turkcell Iletisim Hizmetleri AS (TKC, TCELL.IS) said MTN made improper payments to an Iranian and to a South African government official between 2004 and 2005 to enable the company to secure a license to operate in Iran.

Phuthuma Nhleko, former CEO of MTN, said Sunday that Turkcell's claims are "far-fetched."

"During my tenure as group CEO of MTN no bribes were authorized or paid by the MTN Group to any South African or Iranian government officials to secure the mobile license in Iran," Nhleko said.

MTN holds a 49% stake in Irancell, Iran's No. 2 mobile-phone operator. Turkcell lost out to MTN in 2005 in securing the license, the second to be tendered in Iran. Around 21% of MTN's subscribers are in Iran.

Nhleko's denial of fault follows MTN's current management statement last week that it believes the company is innocent.

Turkcell's renewed accusations against MTN come as the U.S. is stepping up pressure against foreign companies operating in Iran as a way to cut off revenue to the Iranian regime to stop what it says is nuclear weapon development, a claim Iran denies.

MTN this year appointed an external committee to investigate Turkcell's allegations. MTN recently said talks with Turkcell to resolve the issue broke down and that Turkcell hadn't accepted an offer to participate in the investigation.

-By Devon Maylie, Dow Jones Newswires; +27 11 783 7848; devon.maylie@dowjones.com

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