MTN Group was trading nearly 3% higher on the JSE in afternoon trading on Thursday after it emerged that rival Turkcell had filed to drop its US$4,2bn lawsuit against the South African-headquartered telecommunications operator.
The counter has added 18,7% in the past 12 months, but at R166/share is still trading below peaks of above R180/share reached earlier this year.
Turkcell filed the lawsuit in the US, claiming MTN conspired with and bribed Iranian officials to win a licence in Iran that had originally been promised to Turkcell, which is headquartered in Turkey. MTN was granted the licence in 2005, over Turkcell.
MTN Group CEO Sifiso Dabengwa on Thursday welcomed Turkcell’s decision to withdraw its legal action. The decision followed last month’s ruling by the US supreme court that restricted the ability of foreign companies to bring cases before US courts alleging corporate misconduct that took place outside the US.
Last October, the supreme court postponed the case in order to await the outcome of a case concerning a human rights law, first enacted in 1789, called the Alien Tort Statute. The statute formed the basis of Turkcell’s suit.
“Turkcell’s decision to drop its claim was expected. However, we welcome it,” Dabengwa said, adding that MTN had “zero tolerance for corruption and unethical business”.
“MTN is one of Africa’s success stories, a great company founded on innovation, courage and values of honesty,” he said.
Although MTN professed its innocence throughout proceedings, it launched an independent, year-long investigation into the allegations, the Hoffmann Committee, which cleared MTN of wrongdoing and labelled Turkcell’s accusations a “fabric of lies, distortions and inventions”. — (c) 2013 NewsCentral Media
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