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US lawyers blast MTN’s Middle East exit plans

By , Africa editor
Africa , 11 Aug 2020
Outgoing MTN CEO Rob Shuter.
Outgoing MTN CEO Rob Shuter.

US lawyers appearing in the matter against MTN over alleged payments to terrorists in Afghanistan have slammed the decision by the mobile operator to exit the Middle East region in the next three to five years.

Ryan Sparacino attorneys believe MTN is trying “to squeeze every last dollar out of” its alleged partnership with the Iranian Revolutionary Guards Corps (IRGC).

Sparacino focuses on complex investigations often involving US government enforcement agencies and has worked on “sensitive matters” in Europe, Asia and the Middle East.

MTN announced last week that plans are afoot for Africa’s largest mobile operator to exit the Middle East, and focus on its burgeoning operations on the continent.

It said it is simplifying its portfolio, and the Middle East operations, which contribute less than other regions to the group, will be offloaded.

“As part of our ongoing portfolio review, we believe the group is best served to focus in the future on our pan-African strategy. We will, therefore, be exiting the Middle East in an orderly manner over the medium-term. As a first step, we are in advanced discussions to sell our 75% stake in MTN Syria,” said outgoing CEO Rob Shuter.

The MTN Middle East operations have been controversial in the 15 years that Africa’s largest telco has operated in that region.

In the current matter in which Sparacino is appearing on behalf of US clients, MTN is facing fresh allegations of aiding terror group al-Qaida in Afghanistan.

In Iran, the mobile operator has repeatedly rebuffed bribery allegations after being accused by Istanbul-based Turkcell that MTN engaged in illicit activity to gain its GSM licence in Iran in 2005.

Turkcell 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%.

Commenting on the move by MTN to “orderly exit the Middle East over the medium-term”, Sparacino says: “As the families allege in their complaint, MTN is effectively a joint venture partner with the IRGC, Iran’s leading terrorist organisation.

“Instead of immediately ending its relationship with the IRGC, and its related support for Iran-backed terrorists in Afghanistan, MTN has decided to try to squeeze every last dollar out of its partnership with the Iranians.”

Nompilo Morafo, MTN group executive for corporate affairs, said the telco had “no comment” on Sparacino’s claims.

However, Shuter previously said the telco is reviewing new allegations of aiding terror groups “in consultation with our legal advisers”.

He reiterated MTN conducts business in a responsible and compliant manner in all its territories.

The telco filed a motion to dismiss in April 2020. MTN asked a US court to end the lawsuit and grant a judgement in MTN’s favour for two independent reasons.

“These were because the court lacks jurisdiction over MTN, which does not operate in the United States, and because the complaint does not allege any conduct by MTN that would have violated the US Anti-Terrorism Act.

“Now that the complaint has been amended with additional allegations, MTN anticipates filing another ‘motion to dismiss’ to take these new allegations into account. While MTN is reviewing the new material, it does not change the fundamental defects in the case explained in the April motion,” said MTN.

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