By Howard Sackstein
This week the South African ambassador to Israel was summoned by his hosts for a severe reprimand. Our government’s increasingly aggressive stance on Israel has caused relations between Jerusalem and Pretoria to implode.
One by one we have watched our despotic friends in the Middle East tumble from power and we watch silently as tens of thousands of Syrians die at the hands of Bashar al-Assad and that country spirals towards civil war.
At the end of August SA will attend a Non-Aligned Movement summit in Tehran, seat of one of the most oppressive theocracies of the modern era. Oil and political donations triumph over policy!
Despite our manifest indifference to human suffering, Israel features prominently in our foreign policy.
When Israel stopped a Turkish flotilla from illegally breaking the blockade on Gaza, South Africa, Nicaragua and Ecuador were the only countries, other than Turkey, to withdraw their ambassadors from Tel Aviv.
In March South Africa granted entry to renowned Hamas terrorist Abdul Aziz Umar to visit. Umar was given seven life sentences for taking part in the Café Hillel suicide bombing attack in Jerusalem, which killed seven people. Hamas denies Israel’s right to exist and calls for the expulsion of Jews from the Middle East. Ironically, Umar was dispatched to South Africa to promote Israel Apartheid Week.
On August 22, cabinet approved a plan promoted by pro-Palestinian advocates “to require traders in South Africa not to incorrectly label products that originate from the Occupied Palestinian Territory as products of Israel”. Minister of Trade and Industry Rob Davies denied the move was politically motivated. But he was soon contradicted by the deputy minister of international relations, Marius Fransman, who said “economic diplomacy could be one of the most effective weapons of change in the Palestinian situation. I am glad to inform you that our government released a government notice, as a strategy to apply economic pressure on Israel”.
So sympathetic has South Africa become to the anti-Israel cause, that terrorists last month plotted a foiled attack on Israeli targets in South Africa.
When a group of South African Jewish organisations and business leaders attempted to address the poor service-delivery record of our government by training South Africans in Israel, Deputy Minister of International Relations Ebrahim Ebrahim applied pressure to scupper the trips.
Over the past 60 years Israel has been training people throughout the continent. Under the leadership of the Israeli trade union movement black South African civic leaders, trade unionists and NGOs have been trained in Israel since the 1970s. Yehuda Paz was banned by the apartheid government from entering South Africa. Today a post-apartheid government attempts to ban South Africans from travelling to Israel to meet Paz.
Last week Ebrahim informed South Africans that Pretoria discourages all South Africans from visiting Israel. He said “because of the treatment and policies of Israel towards the Palestinian people, we strongly discourage South Africans from going there”.
Probably the most scathing criticism of the deputy minister came from the chief rabbi of South Africa, Dr Warren Goldstein, who described the deputy minister as unfit to hold public office and demanded he resign. Goldstein said: “Your actions hark back to apartheid-style control of information and censorship. For the sake of peace and justice, we need more information, not less; we need more dialogue, not less; we need more connections with other societies, not less.”
Officials in Ebrahim’s own department told the City Press that Ebrahim was old and sometimes did not understand policy.
Israel has little to gain from its contributions to South Africa. In the mind of Israel, South Africa is underdeveloped, battling with corruption, spiralling unemployment, chronic under-education and crippling service delivery.
South Africans must worry that Israel may take action to restrict its technology from being used in South Africa. Many farmers in rural South Africa have moved from subsistence farming to commercial farming based entirely on Israeli know-how and technology.
South Africa’s bona fides have been further dented by the MTN-Turkcell court case in the US. Turkcell alleges that South Africa protected Iran at the International Atomic Energy Agency in return for awarding a cellular licence to MTN. Assisting Iran to obtain nuclear weapons, not only destabilises the entire Middle East, but puts South Africa on a collision path.
South Africa has abandoned its desire to play any meaningful role in Middle East peace. Its failure to take any moral stand on international conflicts other than Israel/Palestine has undermined its own credibility. Its pronouncements are mere platitudes to gain domestic Muslim votes in the Western Cape and while service-delivery protests spread across the country fewer and fewer South African government officials will receive the training in Israel they desperately need.
Howard Sackstein has a degree in law and international relations, a post-graduate law degree and a masters in political advocacy and international conflict resolution. He was one of the founders of the Jewish anti-apartheid movement in South Africa and was executive director of South Africa’s Independent Electoral Commission. He led the only ANC delegation to ever visit Israel and took Nelson Mandela to Brussels on behalf of the World Jewish Congress.
Source: Mail & Guardian
Showing posts with label Turkcell. Show all posts
Showing posts with label Turkcell. Show all posts
Friday, August 31, 2012
Thursday, April 5, 2012
Iran 'puts the screws' on MTN
MTN is facing a storm over claims that it helped the Iranian government to spy on local subscribers and assisted the regime in its brutal crackdown on protesters in 2009 and 2010. In court papers lodged in the United States last week, rival mobile operator Turkcell alleged that MTN told its Iranian military-linked partners it would allow the defence ministry to eavesdrop on subscribers. Sources close to MTN's Iranian business have also described an Orwellian environment in the company's Tehran headquarters, where it allegedly gave military intelligence officials "open" access to subscribers’ details. The sources claimed:
Iran's mobile operators were harshly criticised for their alleged role in quelling protests that followed Iranian President Mahmoud Ahmadinejad's disputed victory in the 2009 elections. Activists who claimed to have been tortured after being arrested said that intelligence officials had their cellphone data.
'Human rights violations'
This week, the Democratic Alliance asked the South African Human Rights Commission to investigate whether MTN "may be directly or indirectly responsible for human rights violations in Iran". DA MP David Maynier said there was no evidence that MTN Irancell was involved directly or indirectly, but he cited media reports that the company bought equipment to monitor calls, filter and block SMSes, and establish the location of users. MTN flatly denied the claims this week, saying: "On human rights, the group takes direction from and adheres to the policies of both the South African government and the United Nations. South Africa has human rights enshrined as fundamental principles within its Constitution.
"Given South Africa's own recent history and our struggle against apartheid, the centrality of civil rights is at the core of our culture as a company and as individuals."
The company said the equipment it used in Iran was not intended to monitor dissidents "nor is there any evidence that the Iranian government has used the data collected to identify and locate citizens or dissidents". MTN is a 49% shareholder in Irancell. Fifty-one percent is held by an Iranian state-linked consortium, which is dominated by a subsidiary owned by the defence ministry known as Sairan, or Iran Electronics Industries. Sairan is subject to US and European Union sanctions that target proliferators of "weapons of mass destruction". It also holds a share in consortium Arya Hamrah, which owns and runs MTN Irancell's data centre that houses the company’s servers and hardware.
Military intelligence
The sources familiar with MTN's Iranian operations said that, because of these ownership structures, Irancell readily gave information about subscribers to intelligence officials. One of the sources said: "MTN's data centre in Iran is effectively run by the military and military intelligence. None of the intelligence organisations needs to go through normal procedures to access subscriber data and track individuals." Describing the climate at MTN's headquarters, a senior official said it was dominated by the presence of Iran's military intelligence officials and the "morality police".
"There was a tea lady who just stood at the printer all day. Her job was to watch us."
The woman, understood to be a member of the "morality police", would scold female staff whose clothing was considered too revealing and signalled her displeasure over "inappropriate" behaviour. Communicating by email, the source said: "The people on the second floor are from military intelligence and the Basij and some clerics. They oversee the intelligence and moral activities of the employees of Irancell. All emails, telephone conversations and SMSes of employees are monitored on an ongoing basis. This is then exposed to MTN against the threat that they will kick out MTN when they need concessions from it."
The staffer described how men from the second floor would accompany Dezfouli to collect data on individuals and political dissidents: "On several occasions someone from the second floor and [Dezfouli] would come to the managed services group and say 'give us all the details for this number', and they would have to." The staffer said subscription and location data and call and SMS histories were handed over. The company's data warehouse is outsourced to a South African company, PBT. According to the source: "PBT simply provides a data warehousing function. In other words, they extract data and provide data-mining functions for product development, market segmentation, etcetera. MTN owns the data, so they don't really have a choice."
Tracking activities
PBT spokesman Nitesh Vallabh said: "We only transform the data into aggregated information as requested by [MTN] for management information to manage the business." MTN used the information to help it profile and market to its customer base; it was not supposed to be used to identify and track the activities of individuals, the source said. But this did happen.
"In 2009 and 2010, it would happen four to five times in a month. It spiked whenever there were rallies or government protests. But it didn't happen every month."
In one case, the staffer said, he recognised a number as belonging to a friend, an active member of Iran's opposition Green Party.
"We were friends and talked maybe every two weeks. Then one day a request came for his number and [they] gave them his data. I tried to call him that night and I could not reach him. Four months later I still couldn’t reach him on the number or Skype."
In another case, the staffer said, he was talking to an acquaintance in South Africa in their home language when a voice broke in to say: "English, English, English!" He was using an Irancell SIM at the time, "but whether this was a national or an MTN function, I don’t know."
Shortly before going to print, MTN Human Resources Head Paul Norman submitted the following written response to questions over allegations that it assisted the Iranian regime in monitoring the communications and movements of political activists:
"MTN's role in Iran is mostly as a technical partner. It is a non-controlling shareholder. Fewer than 30 MTN expats (not all South African) are employed in Irancell, out of around 2000. Whatever equipment MTN has acquired for Irancell was for normal business reasons. This is the same software we utilize at other MTN operations. To suggest that we acquired such equipment with the active purpose of enhancing the Iranian government’s capacity to monitor its citizens outside the law is simply outrageous. We have never cut off Skype and we do not own the international gateway. Some of the equipment listed was purchased to develop our 'homezone' offerings, which allow reduced rates within specific regional areas and thus expands the offering to more people.
"The data warehousing software was acquired to predict, churn and to see when airtime is running out and suggest new products and services to customers. This is standard software that is used by telcos, financial services and other companies around the world to improve the service that customers receive. It has nothing to do with interception, nor is there any evidence that the Iranian government has used the data collected to identify and locate citizens or dissidents.
"It is important to note that when MTN entered Iran, there were only around four million subscribers in total. Today there are almost 35 million subscribers, of whom more than 60% are below 25 years old. These are young people who use the network to communicate with each other, Skype, access Google and tweet each other. MTN works hard, with international legal advisors, to ensure that it is sanctions compliant. MTN's views on human rights are clear. We are a South African company, founded in the year of our first democratic elections under a new constitution.
Civic and human rights are vital to the company, and as the individuals that work at MTN. MTN has a social and ethics committee of the board to look as such issues. One of our core values is respect human rights and privacy rights of people in all the markets in which we operate. We oppose abuse of such rights by any party, including governments, and we communicate our procedures extensively internally. We expect all our business partners to abide by our code of ethics
"Mobile telecoms has been a force for political and economic liberation in the emerging world over the last 10 years. MTN is proud of the part it played in contributing to this. But we accept the ethical complexities around telecoms in this new environment, and the potential for their manipulation for unethical means.
These are new areas of ethics and political debate. These issues also impact other telecom operators and Internet providers across emerging markets. MTN is keen to work with international bodies to construct clearer international standards."
*Got a tip-off for us about this story? Email amabhungane@mg.co.za
Source: Mail & Guardian
- Because MTN Irancell and its data centre were part-owned by the Iranian military, subscriber data was shared "on a collegial basis" with the intelligence sector;
- A shadowy "second floor" in MTN's building was populated by military intelligence officials, the volunteer militia known as the Basij ("morality police") and clerics;
- During the 2009 and 2010 Green movement protests, men from the second floor, accompanied by Irancell chief executive Alireza Dezfouli, allegedly approached data warehouse staff regularly to demand detailed records for individuals;
- In one case, they demanded the number of a known Green Party activist, who could not be reached after his information had been given to military intelligence; and
- Third parties listened in to staff calls over Irancell SIMs and would intervene and demand that the staff speak in English and not in other South African languages.
Iran's mobile operators were harshly criticised for their alleged role in quelling protests that followed Iranian President Mahmoud Ahmadinejad's disputed victory in the 2009 elections. Activists who claimed to have been tortured after being arrested said that intelligence officials had their cellphone data.
'Human rights violations'
This week, the Democratic Alliance asked the South African Human Rights Commission to investigate whether MTN "may be directly or indirectly responsible for human rights violations in Iran". DA MP David Maynier said there was no evidence that MTN Irancell was involved directly or indirectly, but he cited media reports that the company bought equipment to monitor calls, filter and block SMSes, and establish the location of users. MTN flatly denied the claims this week, saying: "On human rights, the group takes direction from and adheres to the policies of both the South African government and the United Nations. South Africa has human rights enshrined as fundamental principles within its Constitution.
"Given South Africa's own recent history and our struggle against apartheid, the centrality of civil rights is at the core of our culture as a company and as individuals."
The company said the equipment it used in Iran was not intended to monitor dissidents "nor is there any evidence that the Iranian government has used the data collected to identify and locate citizens or dissidents". MTN is a 49% shareholder in Irancell. Fifty-one percent is held by an Iranian state-linked consortium, which is dominated by a subsidiary owned by the defence ministry known as Sairan, or Iran Electronics Industries. Sairan is subject to US and European Union sanctions that target proliferators of "weapons of mass destruction". It also holds a share in consortium Arya Hamrah, which owns and runs MTN Irancell's data centre that houses the company’s servers and hardware.
Military intelligence
The sources familiar with MTN's Iranian operations said that, because of these ownership structures, Irancell readily gave information about subscribers to intelligence officials. One of the sources said: "MTN's data centre in Iran is effectively run by the military and military intelligence. None of the intelligence organisations needs to go through normal procedures to access subscriber data and track individuals." Describing the climate at MTN's headquarters, a senior official said it was dominated by the presence of Iran's military intelligence officials and the "morality police".
"There was a tea lady who just stood at the printer all day. Her job was to watch us."
The woman, understood to be a member of the "morality police", would scold female staff whose clothing was considered too revealing and signalled her displeasure over "inappropriate" behaviour. Communicating by email, the source said: "The people on the second floor are from military intelligence and the Basij and some clerics. They oversee the intelligence and moral activities of the employees of Irancell. All emails, telephone conversations and SMSes of employees are monitored on an ongoing basis. This is then exposed to MTN against the threat that they will kick out MTN when they need concessions from it."
The staffer described how men from the second floor would accompany Dezfouli to collect data on individuals and political dissidents: "On several occasions someone from the second floor and [Dezfouli] would come to the managed services group and say 'give us all the details for this number', and they would have to." The staffer said subscription and location data and call and SMS histories were handed over. The company's data warehouse is outsourced to a South African company, PBT. According to the source: "PBT simply provides a data warehousing function. In other words, they extract data and provide data-mining functions for product development, market segmentation, etcetera. MTN owns the data, so they don't really have a choice."
Tracking activities
PBT spokesman Nitesh Vallabh said: "We only transform the data into aggregated information as requested by [MTN] for management information to manage the business." MTN used the information to help it profile and market to its customer base; it was not supposed to be used to identify and track the activities of individuals, the source said. But this did happen.
"In 2009 and 2010, it would happen four to five times in a month. It spiked whenever there were rallies or government protests. But it didn't happen every month."
In one case, the staffer said, he recognised a number as belonging to a friend, an active member of Iran's opposition Green Party.
"We were friends and talked maybe every two weeks. Then one day a request came for his number and [they] gave them his data. I tried to call him that night and I could not reach him. Four months later I still couldn’t reach him on the number or Skype."
In another case, the staffer said, he was talking to an acquaintance in South Africa in their home language when a voice broke in to say: "English, English, English!" He was using an Irancell SIM at the time, "but whether this was a national or an MTN function, I don’t know."
Shortly before going to print, MTN Human Resources Head Paul Norman submitted the following written response to questions over allegations that it assisted the Iranian regime in monitoring the communications and movements of political activists:
"MTN's role in Iran is mostly as a technical partner. It is a non-controlling shareholder. Fewer than 30 MTN expats (not all South African) are employed in Irancell, out of around 2000. Whatever equipment MTN has acquired for Irancell was for normal business reasons. This is the same software we utilize at other MTN operations. To suggest that we acquired such equipment with the active purpose of enhancing the Iranian government’s capacity to monitor its citizens outside the law is simply outrageous. We have never cut off Skype and we do not own the international gateway. Some of the equipment listed was purchased to develop our 'homezone' offerings, which allow reduced rates within specific regional areas and thus expands the offering to more people.
"The data warehousing software was acquired to predict, churn and to see when airtime is running out and suggest new products and services to customers. This is standard software that is used by telcos, financial services and other companies around the world to improve the service that customers receive. It has nothing to do with interception, nor is there any evidence that the Iranian government has used the data collected to identify and locate citizens or dissidents.
"It is important to note that when MTN entered Iran, there were only around four million subscribers in total. Today there are almost 35 million subscribers, of whom more than 60% are below 25 years old. These are young people who use the network to communicate with each other, Skype, access Google and tweet each other. MTN works hard, with international legal advisors, to ensure that it is sanctions compliant. MTN's views on human rights are clear. We are a South African company, founded in the year of our first democratic elections under a new constitution.
Civic and human rights are vital to the company, and as the individuals that work at MTN. MTN has a social and ethics committee of the board to look as such issues. One of our core values is respect human rights and privacy rights of people in all the markets in which we operate. We oppose abuse of such rights by any party, including governments, and we communicate our procedures extensively internally. We expect all our business partners to abide by our code of ethics
"Mobile telecoms has been a force for political and economic liberation in the emerging world over the last 10 years. MTN is proud of the part it played in contributing to this. But we accept the ethical complexities around telecoms in this new environment, and the potential for their manipulation for unethical means.
These are new areas of ethics and political debate. These issues also impact other telecom operators and Internet providers across emerging markets. MTN is keen to work with international bodies to construct clearer international standards."
*Got a tip-off for us about this story? Email amabhungane@mg.co.za
Source: Mail & Guardian
Friday, March 30, 2012
MTN's cash, weapons and ties in Iran
Cellphone giant MTN was so desperate to win a mobile operating licence in the "virgin" territory of Iran that it allegedly put together a package of bribes, trading opportunities in sophisticated weaponry, capital investment and diplomatic influence that the Islamic Republic could not resist. That is the claim of rival firm Turkcell, which was pushed out of the deal when MTN arrived on the scene. It backs up the allegation with a raft of what appears to be internal MTN documents, leaked from the heart of the company's Iran operation.
The allegations are set out in a $4-billion (R32-billion) lawsuit launched in the US District Court of Columbia in Washington DC this week. The scheme, allegedly known in MTN as "Project Snooker", was allegedly driven from the top by then-chief executive Phuthuma Nhleko, with the assistance of Irene Charnley (then commercial director), and Sifiso Dabengwa (then chief operating officer). It included alleged bribes to South Africa's ambassador to Iran, Yusuf "Jo-Jo" Saloojee, and Iran's deputy foreign minister, Javid Ghorbanoghli; the involvement of former defence minister Mosiuoa Lekota in the procurement of highly sensitive weapons systems from parastatal Denel; and access for Iranian officials to South Africa's top nuclear envoy, Abdul Minty. The memos attached to the court papers apparently set out how Ghorbanoghli, dubbed "Long John", was allegedly paid $400 000 to politically undermine Turkcell's position while Saloojee, codenamed "Short John'', was allegedly paid $200 000 to help MTN deliver pro-Iran votes from South Africa at the International Atomic Energy Agency (IAEA) amid controversy over Iran's nuclear plans.
The Irancell cellphone network was projected to be worth $31.6-billion in revenues over 15 years for a licence fee of $380-million. The licence holder and the Iranian state-owned telecommunications company were to enjoy exclusive use of the market for two years before a third competing licence would be awarded. Turkcell won the bid on February 18 2004 and MTN came second. But Turkcell claims that MTN, through "unprecedented corrupt acts", blocked it from entering the agreements, clearing the regulatory environment and completing post-award obligations. To secure the 49% stake in Irancell, MTN effectively also allegedly carried all the costs for its 51% partner through "sham loans", Turkcell says.
It is alleged in the papers that MTN paid the €300-million licence fee, capitalisation costs and share transfer tax of Iran's state-owned defence company, Sairan (also known as Iran Electronic Industries or IEI) and Bonyad (one of the five Iranian quasi-independent charitable foundations that is integral to Iran's defence establishment) in exchange for their assistance within the ministry of defence and the "Supreme Leader".
What follows is a summary of Turkcell's claims in its court application and the supporting documentation that allegedly emanates from within MTN. It has not yet been tested in court, nor has MTN commented on the authenticity of the documents. A few weeks after Turkcell was made the preferred bidder, Charnley met with Ghorbanoghli (Long John) in Tehran where the minister told her that MTN's only chance to oust Turkcell was to win political influence in Iran and use South Africa's influence to favour the Iranian government at the UN Security Council. And so began "Project Snooker" -- the plan on how best to use Iranian and South African government officials to allegedly gain political influence. MTN reached out to a former deputy minister for the Iranian ministry of information and communications technology and to Mohammed Mokhber, the deputy president of a major charitable foundation known as Bonyad Mostazafan, controlled by the supreme leader of Iran.
The Bonyad foundation is controlled by the Iran Revolutionary Guard Corps, the military complex formed by Iran's supreme leader, Ayatollah Ali Khamenei, and is believed to control about one-third of the Iranian economy. It is known for engaging in Iran's shadow foreign policy. MTN was then introduced to Ebrahim Mahmoudzadeh, a former Iranian deputy minister of defence and then-president of Iran Electronic Industries, who reported directly to the Iranian minister of defence. As one of Turkcell's local minority partners in the Irancell consortium, Mokhber and Mahmoudzadeh told MTN executives they would be willing to work with the South African company and dump Turkcell if MTN could obtain certain defence equipment, support its nuclear programme and pay for the licence and other benefits. For example, MTN was urged to facilitate the purchase of certain military equipment from South Africa for Iran's state-owned defence company, Sairan, which was previously blocked by South Africa's national conventional arms control committee. For more than a year, MTN executives regularly visited Mahmoudzadeh and the ministry of foreign affairs to reinforce its political influence.
In about April 2004, the Iranians tested MTN's ability to deliver on defence products and nuclear votes. Sairan requested that MTN arrange a meeting with Denel, South Africa's largest manufacturer of defence equipment, as well as then-defence minister Mosiuoa Lekota. MTN was told Iran was building its defence force and it wanted to purchase military radios, encryption technologies and pilot display computer chips manufactured in the Western Cape, which South Africa refused to sell them previously. MTN made a commitment that it could procure this equipment as well as facilitate installation of eavesdropping technologies on MTN devices were they to be awarded the 49% stake in Irancell.
The MTN board of directors, including Cyril Ramaphosa, Nhleko, Dabengwa and Charnley, received regular reports on the status of Turkcell's licence and MTN's strategies. Enter Saloojee, "aka Small John", who was appointed South Africa's ambassador to Iran on May 23 2004. Before he left for Tehran, MTN briefed him about the licence situation and about its desire to win the licence from Turkcell. "Small John" started working closely with "Long John" and convinced the Iranian government that MTN had enough political clout to help Iran on its nuclear and defence equipment needs. Charnley was key to that mix because of her political connections in South Africa, particularly with Lekota -- she worked closely with him in the United Democratic Front during the 1980s. Ramaphosa also enjoyed a close relationship with Lekota because of their ties in the ANC.
It is well known in political circles that Charnley and Nhleko were closely aligned with former president Thabo Mbeki. Charnley is friends with Mbeki's wife, Zanele, who assisted the former MTN executive with funds to help start Smile Communications, a telecoms company. "Small John" was also allegedly close to Mbeki, with whom he had shared a house at some point during the struggle. In about June 2004, Saloojee invited Charnley and Nhleko to his house for dinner and that's where the discussion of the bribes for both "Small John" and "Long John" took place. Saloojee explained that he was hoping to purchase a house in South Africa for $200 000. On April 26 2007, MTN made a direct payment into a trust account for Saloojee, which was received by his property attorneys, Gildenhuys Lessing Malatji Inc. The property transaction was closed on September 26 2007.
MTN had also made a promise to Ghorbanoghli to reimburse him for his assistance and Saloojee had helped the Iranian with personal favours, such as arranging for his children to be educated in South Africa. It was at a dinner in May 2005 that Charnley offered Ghorbanoghli a $400 000 bribe through a "sham" consultancy agency agreement to reward his efforts to politically undermine and destroy Turkcell's position as the licence holder and to deliver the licence to MTN instead. The "sham" consultancy payment was authorised by Nhleko on behalf of MTN in a memo dated December 11 2006.
Charnley was sent a confidential memo in which Ghorbanoghli says he has arranged for a friend in Dubai to receive the funds on his behalf through a company called Aristo Oil International Services. In an invoice from Aristo it described the scope of the responsibilities as "introduce MTN-Iran to key role-players, arrange meetings and generally provide support and assistance during the negotiations and conclusion of the necessary agreements that will provide for MTN's entry into the Iranian mobile market". Ghorbanoghli delivered on that. On September 17 2005 MTN's executive team flew to Iran and finalised agreements with the IEDC and payment structures. A day later MTN issued a notice to its board members regarding "Project Snooker" and its decision to officially take up the GSM licence in Iran.
On September 21 2005, two months before being awarded the licence, Nhleko delivered a confidential memorandum to Dabengwa, Charnley and MTN's former chief financial officer, Robert Nisbet, which was copied to the Chris Kilowan and Paul Norman setting out in detail the ground rules for "Project Snooker" and how MTN would deliver on the defence and nuclear support promises.
Weapons: The promised Denel collaboration, which clearly came off
In August 2004, MTN accompanied Lekota on a trip to Iran, which the cellphone company organised and paid for, where they struck an "arms- for-licence" deal with the Iranian ministry of defence to deliver "The Fish". Nhleko and Charnley were present at the meeting where they signed a confidential memorandum of understanding, promising that South Africa would deliver "heaven, earth, and fish", meaning the elicit arms and technology in exchange for the licence.
"The Fish" was a code for the name for a combination of military co-operation and big-ticket defence equipment, including Rooivalk helicopters, frequency-hopping encrypted military radios, sniper rifles, G5 howitzers, cannons, armoured landmine-proof personnel carriers, radar technology, pilot "heads-up" display technology and other defence articles that included US systems and components. Iran didn't have access to this equipment legitimately because of US and international sanctions against it at the time. To reassure the Iranian authorities, MTN paid for Iran's nuclear negotiator to meet with then-president Mbeki at his Cape Town residence, a meeting which was apparently facilitated by Charnley, Ramaphosa and Saloojee through their political connections.
On November 16 2004, Charnley sent a letter via fax on behalf of MTN, copied to Saloojee, facilitating a meeting between Denel and the Iran Helicopter Support and Renewal Co. The letter indicated that Charnley had met with then-Denel chief executive Victor Moche to provide helicopter technology from Denel to produce helicopters with US Apache technology in Iran. Denel's former head for North Africa and the Middle East, Donald Romfolo, confirmed they had been in talks with Iran's defence ministry and state arms company, Sairan, in 2004. But he said the national conventional arms control committee barred the company from trading in Iran "because of the US sanctions". He denied any knowledge of Charnley and said he knew of no talks with MTN or pressure applied by the company.
Lekota, now president of Cope, flatly denied on Thursday that MTN had paid for any visit by him to Iran. "This is absolutely fallacious. Defence was never bankrupt when I was there." However, he confirmed one or more visits "in my official capacity" to Iran, and he confirmed that "in one of those visits it coincided with the MTN people also travelling there -- they did form part of the South African delegation going there". "I had meetings with the relevant minister and I think even the head of state … but at no stage did I have any meetings with the cellphone company MTN, I was never in any meeting. I had no obligation or, in fact, no power to negotiate anything on behalf of MTN. I think MTN negotiated their business with their counterparts quite independent of their mission. I could not have made any promises to the Iranian government on defence co-operation without going through Cabinet."
Later, confronted with a specific allegation that he had met his Iranian counterpart in the presence of MTN officials, he conceded that "when official business had been done … we might have been entertained, and that the businesspeople that may have been part of this visit may have been part of that". "I deny that there was any negotiations around MTN's business interests by the ministry of defence led by myself." Lekota denied that he would have promised any weapons outside of the arms control committee's approvals that would have to follow. "I never made any commitments of the nature you are suggesting." In the end, and once Iran had handed the licence to MTN, it seems whatever promises about defence materiel may have been made, came to naught.
In March 2007, a year and half after MTN was awarded the licence, MTN began facing even greater pressure from its Iranian partners to deliver on some of its defence and nuclear-related promises. MTN's representative in Iran, Chris Kilowan, sent a memo to Nhleko from the Iranians calling on the company to deliver on its defence promises. "[MTN's chief executive Nhleko] should attempt as a matter of urgency to contact the president of South Africa and impress upon him that the failure to resolve the defence matters to the satisfaction of Iran will have severe negative repercussions for MTN," read the memo attached as an exhibit. The "highly confidential" memo recounts Saloojee's description of visits to South Africa by top Iranian officials on behalf of supreme leader Ayatollah Ali Khamenei and President Mahmoud Ahmadinejad.
Khamenei dispatched Ali Larijani, then the secretary of Iran's Supreme National Security Council, to remind Mbeki "that certain defence-related promises were made by the South African minister of defence in 2004 in exchange for which MTN was allowed to replace Turkcell in the Irancell consortium". The same memo reports that Manouchehr Mottaki, then Iran's foreign minister, was sent by Ahmadinejad to "get a direct answer" from Mbeki about South Africa's alleged promises to sell arms to Iran. Kilowan wrote in the memo: "Mottaki reiterated their understanding that MTN was allowed to replace Turkcell in exchange for defense co-operation."
On the UN Security Council vote, the memo said: "It is now a matter of public record what happened to the vote on Saturday … that South Africa also voted in favour of the sanctions." The memo also relates Saloojee's concerns. "The Iranians did not expect the voting to go otherwise, although they were hopeful that South Africa would at least abstain. As it is, South Africa is now seen as having made a U-turn on the matter and we will have to closely monitor the reaction of the Iranians to the fact." MTN also found itself being threatened in late 2007 by "Long John" for not delivering on its promises. Mbeki's spokesperson, Mukoni Ratshitanga, told the M&G: "Former president Thabo Mbeki does not believe that he should oblige attempts to drag his name into this matter and will therefore not comment."
The Votes: International Atomic Energy Agency and the United Nations
Throughout 2004 and 2005, at the same time that MTN was lobbying hard to displace Turkcell, Iran came under intense pressure over its nuclear enrichment programme. The international community had repeatedly voted against the state before the International Atomic Energy Authority and the UN Security Council, calling on it to meet its obligations under the Nuclear Non-Proliferation Treaty. In fact, as Turkcell detailed, from 2004 to 2008, South Africa largely joined the votes against Iran except for a brief hiatus at the end of 2005 and the beginning of 2006, which coincided with the November 2005 license award. "MTN learned that the Iranians understood South Africa to play a critical role in being able to lead the 'non-aligned' nations on nuclear votes in international bodies," Turkcell stated. And so, Turkcell claims, the cellphone giant orchestrated an "informal" meeting between Mbeki and Iran's nuclear chief, Hassan Rowhani, at a dinner at Mbeki's Cape Town residence. "MTN paid for adviser Rowhani to stay at a hotel in Cape Town, sponsored the large dinner party, and covered all travel logistics," Turkcell claims. "Consistent with MTN's promises, the president assured adviser Rowhani that the South African government would support Iran at the [International Atomic Energy Authority]." But Mbeki, through his spokesperson, refused to comment on this account.
That September, when the International Atomic Energy Authority board found Iran not to be complying with its non-proliferation treaty obligations, South Africa abstained. Come November 20, Turkcell detailed, MTN expected it was to be awarded the licence. Instead, the Iranians are said to have delivered the message that should South Africa vote against Iran at a crucial November 24 vote before the IAEA, it would "cause trouble".
The decision the IAEA has to make was on whether to refer Iran to the UN Security Council for breaching the NPT. This appears to have sent the company's mavericks into a bit of a spin. It is alleged they approached Saloojee, who approached South African ambassador to the IAEA Abdul Minty. Other frantic calls were made, and as it happened, South Africa abstained from the vote. Three days later the Iranians issued the GSM license to MTN.
The M&G was unable to reach Minty on Thursday, but when he was approached on the matter in February, he strenuously denied having been influenced: "At no point did [MTN] approach me to influence me in any direction." According to him, South Africa's policy on Iran at the IAEA had been "very consistent". After being awarded the 49% stake, MTN made good on its promises to its 51% shareholder, carrying all its costs. MTN agreed to pay the IEDC's $88-million capital share of MTN Irancell as well as their share of the $300-million licence fee.
The Iranian partners were clear that they were not willing to pay any "interest" on, or put up security for, a "loan". Charnley presented the proposed arrangement to MTN. Rob Nisbett, the chief financial officer, was apparently shocked at the proposal and refused to permit the deal on "improper and unsecured terms". He insisted that a formal loan agreement be negotiated and entered into with the parties. He also threatened to resign if this was not done.
On November 15 2005 MTN Group directed its subsidiary, MTN International (Mauritius) Ltd, to enter into sham "loan" agreements with the IEDC. Nisbett still voiced concern about this arrangement and informed the executive team that the "loans" put MTN at huge risk. Nhleko issued Nisbett with a formal written warning for opposing the financial terms and was instructed to authorise the transaction. Documents show MTN made the "loans" through a series of complex "round trip" agreements by shifting the funds around between the IEDC, MTN-Irancell, and MTN Group, which it then recorded on its books as loans. By the time the loans were due, MTN-Irancell was highly profitable -- $118-million profit in 2007, $234-million in 2008, $516-million in 2009, $583-million in 2010 and at least $503-million projected for 2011.
Charnley did not respond to numerous messages left on her cellphone and with an assistant in her office. An automatic message at Saloojee's office -- the South African embassy in Oman where he is ambassador -- said staff did not work on Thursdays, and emails were not answered. Spokespeople for Nhleko and Ramaphosa said they would pass on the M&G's respective messages, but neither responded in time for print deadline.
Department of International Affairs and Cooperation spokesperson Clayson Monyela could not be reached, but last month he denied that any company had influence over South Africa's foreign policy. Calls to Iran's embassy in South Africa were placed on hold, after which no calls were answered.
MTN and its legal advisers were locked in all-day meetings yesterday, filing its JSE news service (Sens) announcement only at 5.30pm in response to the explosive claims made by Turkcell in a lawsuit filed in the Washington Federal Court at 2am South African time.
Africa's largest cellphone operator said the claim had still not been served, but that it would oppose it. The company reiterated that there was "no legal merit" to Turkcell's claim and no basis for such a claim to be brought before a United States court. It also noted the South African government's denial of the allegations that MTN exercised influence over it. In advance of Turkcell filing its claim, MTN announced the formation of an independent committee, under the chairmanship of internationally renowned jurist Lord Hoffmann, to investigate Turkcell's allegations. The Hoffmann committee has already begun its investigations and will report its findings to the MTN board, with any recommendations on actions to be taken as a result of its findings, including their publication. "The Hoffmann committee has invited Turkcell to participate in its investigation, but Turkcell has to date not done so," MTN said in the statement. "The invitation remains open to Turkcell to participate in the Hoffmann committee's investigation."
Turkcell has been threatening to take MTN to the US courts for corruption since February 2, but held out for a settlement from MTN first before it filed. MTN has been calling its bluff by refusing to settle out of court, claiming extortion. Turkcell has argued that MTN has many business interests in the US and that the cellphone company has violated the Alien Tort Statute, a 1789 law that gives US courts jurisdiction in some instances to consider claims by foreigners for illegal conduct that occurred in another country. The law is usually cited in human rights and torture cases.
Meanwhile, Turkcell was yesterday dealing with its own set of issues relating to infighting among its board and shareholders. Reuters reported that the board met to discuss its structure and independent board members. Having founded Turkcell in 1994, Mehmet Emin Karamehmet is locked in a boardroom struggle with the other main shareholders in Turkcell: Altimo and Nordic telecommunications group TeliaSonera.
Turkcell's board has seven members. The three main shareholders -- Cukurova, Altimo and TeliaSonera -- each has two seats. Chairperson Colin Williams is the designated independent board member. Altimo and TeliaSonera want him replaced because they say he sides with Cukurova, Reuters reports. TeliaSonera has a 37% stake in Turkcell, whereas Altimo has a 13.2% stake it bought from Karamehmet in 2005. However, Cukurova's 13.8% stake carries controlling rights because of Turkcell's structure.
Source: Mail & Guardian
The allegations are set out in a $4-billion (R32-billion) lawsuit launched in the US District Court of Columbia in Washington DC this week. The scheme, allegedly known in MTN as "Project Snooker", was allegedly driven from the top by then-chief executive Phuthuma Nhleko, with the assistance of Irene Charnley (then commercial director), and Sifiso Dabengwa (then chief operating officer). It included alleged bribes to South Africa's ambassador to Iran, Yusuf "Jo-Jo" Saloojee, and Iran's deputy foreign minister, Javid Ghorbanoghli; the involvement of former defence minister Mosiuoa Lekota in the procurement of highly sensitive weapons systems from parastatal Denel; and access for Iranian officials to South Africa's top nuclear envoy, Abdul Minty. The memos attached to the court papers apparently set out how Ghorbanoghli, dubbed "Long John", was allegedly paid $400 000 to politically undermine Turkcell's position while Saloojee, codenamed "Short John'', was allegedly paid $200 000 to help MTN deliver pro-Iran votes from South Africa at the International Atomic Energy Agency (IAEA) amid controversy over Iran's nuclear plans.
The Irancell cellphone network was projected to be worth $31.6-billion in revenues over 15 years for a licence fee of $380-million. The licence holder and the Iranian state-owned telecommunications company were to enjoy exclusive use of the market for two years before a third competing licence would be awarded. Turkcell won the bid on February 18 2004 and MTN came second. But Turkcell claims that MTN, through "unprecedented corrupt acts", blocked it from entering the agreements, clearing the regulatory environment and completing post-award obligations. To secure the 49% stake in Irancell, MTN effectively also allegedly carried all the costs for its 51% partner through "sham loans", Turkcell says.
It is alleged in the papers that MTN paid the €300-million licence fee, capitalisation costs and share transfer tax of Iran's state-owned defence company, Sairan (also known as Iran Electronic Industries or IEI) and Bonyad (one of the five Iranian quasi-independent charitable foundations that is integral to Iran's defence establishment) in exchange for their assistance within the ministry of defence and the "Supreme Leader".
What follows is a summary of Turkcell's claims in its court application and the supporting documentation that allegedly emanates from within MTN. It has not yet been tested in court, nor has MTN commented on the authenticity of the documents. A few weeks after Turkcell was made the preferred bidder, Charnley met with Ghorbanoghli (Long John) in Tehran where the minister told her that MTN's only chance to oust Turkcell was to win political influence in Iran and use South Africa's influence to favour the Iranian government at the UN Security Council. And so began "Project Snooker" -- the plan on how best to use Iranian and South African government officials to allegedly gain political influence. MTN reached out to a former deputy minister for the Iranian ministry of information and communications technology and to Mohammed Mokhber, the deputy president of a major charitable foundation known as Bonyad Mostazafan, controlled by the supreme leader of Iran.
The Bonyad foundation is controlled by the Iran Revolutionary Guard Corps, the military complex formed by Iran's supreme leader, Ayatollah Ali Khamenei, and is believed to control about one-third of the Iranian economy. It is known for engaging in Iran's shadow foreign policy. MTN was then introduced to Ebrahim Mahmoudzadeh, a former Iranian deputy minister of defence and then-president of Iran Electronic Industries, who reported directly to the Iranian minister of defence. As one of Turkcell's local minority partners in the Irancell consortium, Mokhber and Mahmoudzadeh told MTN executives they would be willing to work with the South African company and dump Turkcell if MTN could obtain certain defence equipment, support its nuclear programme and pay for the licence and other benefits. For example, MTN was urged to facilitate the purchase of certain military equipment from South Africa for Iran's state-owned defence company, Sairan, which was previously blocked by South Africa's national conventional arms control committee. For more than a year, MTN executives regularly visited Mahmoudzadeh and the ministry of foreign affairs to reinforce its political influence.
In about April 2004, the Iranians tested MTN's ability to deliver on defence products and nuclear votes. Sairan requested that MTN arrange a meeting with Denel, South Africa's largest manufacturer of defence equipment, as well as then-defence minister Mosiuoa Lekota. MTN was told Iran was building its defence force and it wanted to purchase military radios, encryption technologies and pilot display computer chips manufactured in the Western Cape, which South Africa refused to sell them previously. MTN made a commitment that it could procure this equipment as well as facilitate installation of eavesdropping technologies on MTN devices were they to be awarded the 49% stake in Irancell.
The MTN board of directors, including Cyril Ramaphosa, Nhleko, Dabengwa and Charnley, received regular reports on the status of Turkcell's licence and MTN's strategies. Enter Saloojee, "aka Small John", who was appointed South Africa's ambassador to Iran on May 23 2004. Before he left for Tehran, MTN briefed him about the licence situation and about its desire to win the licence from Turkcell. "Small John" started working closely with "Long John" and convinced the Iranian government that MTN had enough political clout to help Iran on its nuclear and defence equipment needs. Charnley was key to that mix because of her political connections in South Africa, particularly with Lekota -- she worked closely with him in the United Democratic Front during the 1980s. Ramaphosa also enjoyed a close relationship with Lekota because of their ties in the ANC.
It is well known in political circles that Charnley and Nhleko were closely aligned with former president Thabo Mbeki. Charnley is friends with Mbeki's wife, Zanele, who assisted the former MTN executive with funds to help start Smile Communications, a telecoms company. "Small John" was also allegedly close to Mbeki, with whom he had shared a house at some point during the struggle. In about June 2004, Saloojee invited Charnley and Nhleko to his house for dinner and that's where the discussion of the bribes for both "Small John" and "Long John" took place. Saloojee explained that he was hoping to purchase a house in South Africa for $200 000. On April 26 2007, MTN made a direct payment into a trust account for Saloojee, which was received by his property attorneys, Gildenhuys Lessing Malatji Inc. The property transaction was closed on September 26 2007.
MTN had also made a promise to Ghorbanoghli to reimburse him for his assistance and Saloojee had helped the Iranian with personal favours, such as arranging for his children to be educated in South Africa. It was at a dinner in May 2005 that Charnley offered Ghorbanoghli a $400 000 bribe through a "sham" consultancy agency agreement to reward his efforts to politically undermine and destroy Turkcell's position as the licence holder and to deliver the licence to MTN instead. The "sham" consultancy payment was authorised by Nhleko on behalf of MTN in a memo dated December 11 2006.
Charnley was sent a confidential memo in which Ghorbanoghli says he has arranged for a friend in Dubai to receive the funds on his behalf through a company called Aristo Oil International Services. In an invoice from Aristo it described the scope of the responsibilities as "introduce MTN-Iran to key role-players, arrange meetings and generally provide support and assistance during the negotiations and conclusion of the necessary agreements that will provide for MTN's entry into the Iranian mobile market". Ghorbanoghli delivered on that. On September 17 2005 MTN's executive team flew to Iran and finalised agreements with the IEDC and payment structures. A day later MTN issued a notice to its board members regarding "Project Snooker" and its decision to officially take up the GSM licence in Iran.
On September 21 2005, two months before being awarded the licence, Nhleko delivered a confidential memorandum to Dabengwa, Charnley and MTN's former chief financial officer, Robert Nisbet, which was copied to the Chris Kilowan and Paul Norman setting out in detail the ground rules for "Project Snooker" and how MTN would deliver on the defence and nuclear support promises.
Weapons: The promised Denel collaboration, which clearly came off
In August 2004, MTN accompanied Lekota on a trip to Iran, which the cellphone company organised and paid for, where they struck an "arms- for-licence" deal with the Iranian ministry of defence to deliver "The Fish". Nhleko and Charnley were present at the meeting where they signed a confidential memorandum of understanding, promising that South Africa would deliver "heaven, earth, and fish", meaning the elicit arms and technology in exchange for the licence.
"The Fish" was a code for the name for a combination of military co-operation and big-ticket defence equipment, including Rooivalk helicopters, frequency-hopping encrypted military radios, sniper rifles, G5 howitzers, cannons, armoured landmine-proof personnel carriers, radar technology, pilot "heads-up" display technology and other defence articles that included US systems and components. Iran didn't have access to this equipment legitimately because of US and international sanctions against it at the time. To reassure the Iranian authorities, MTN paid for Iran's nuclear negotiator to meet with then-president Mbeki at his Cape Town residence, a meeting which was apparently facilitated by Charnley, Ramaphosa and Saloojee through their political connections.
On November 16 2004, Charnley sent a letter via fax on behalf of MTN, copied to Saloojee, facilitating a meeting between Denel and the Iran Helicopter Support and Renewal Co. The letter indicated that Charnley had met with then-Denel chief executive Victor Moche to provide helicopter technology from Denel to produce helicopters with US Apache technology in Iran. Denel's former head for North Africa and the Middle East, Donald Romfolo, confirmed they had been in talks with Iran's defence ministry and state arms company, Sairan, in 2004. But he said the national conventional arms control committee barred the company from trading in Iran "because of the US sanctions". He denied any knowledge of Charnley and said he knew of no talks with MTN or pressure applied by the company.
Lekota, now president of Cope, flatly denied on Thursday that MTN had paid for any visit by him to Iran. "This is absolutely fallacious. Defence was never bankrupt when I was there." However, he confirmed one or more visits "in my official capacity" to Iran, and he confirmed that "in one of those visits it coincided with the MTN people also travelling there -- they did form part of the South African delegation going there". "I had meetings with the relevant minister and I think even the head of state … but at no stage did I have any meetings with the cellphone company MTN, I was never in any meeting. I had no obligation or, in fact, no power to negotiate anything on behalf of MTN. I think MTN negotiated their business with their counterparts quite independent of their mission. I could not have made any promises to the Iranian government on defence co-operation without going through Cabinet."
Later, confronted with a specific allegation that he had met his Iranian counterpart in the presence of MTN officials, he conceded that "when official business had been done … we might have been entertained, and that the businesspeople that may have been part of this visit may have been part of that". "I deny that there was any negotiations around MTN's business interests by the ministry of defence led by myself." Lekota denied that he would have promised any weapons outside of the arms control committee's approvals that would have to follow. "I never made any commitments of the nature you are suggesting." In the end, and once Iran had handed the licence to MTN, it seems whatever promises about defence materiel may have been made, came to naught.
In March 2007, a year and half after MTN was awarded the licence, MTN began facing even greater pressure from its Iranian partners to deliver on some of its defence and nuclear-related promises. MTN's representative in Iran, Chris Kilowan, sent a memo to Nhleko from the Iranians calling on the company to deliver on its defence promises. "[MTN's chief executive Nhleko] should attempt as a matter of urgency to contact the president of South Africa and impress upon him that the failure to resolve the defence matters to the satisfaction of Iran will have severe negative repercussions for MTN," read the memo attached as an exhibit. The "highly confidential" memo recounts Saloojee's description of visits to South Africa by top Iranian officials on behalf of supreme leader Ayatollah Ali Khamenei and President Mahmoud Ahmadinejad.
Khamenei dispatched Ali Larijani, then the secretary of Iran's Supreme National Security Council, to remind Mbeki "that certain defence-related promises were made by the South African minister of defence in 2004 in exchange for which MTN was allowed to replace Turkcell in the Irancell consortium". The same memo reports that Manouchehr Mottaki, then Iran's foreign minister, was sent by Ahmadinejad to "get a direct answer" from Mbeki about South Africa's alleged promises to sell arms to Iran. Kilowan wrote in the memo: "Mottaki reiterated their understanding that MTN was allowed to replace Turkcell in exchange for defense co-operation."
On the UN Security Council vote, the memo said: "It is now a matter of public record what happened to the vote on Saturday … that South Africa also voted in favour of the sanctions." The memo also relates Saloojee's concerns. "The Iranians did not expect the voting to go otherwise, although they were hopeful that South Africa would at least abstain. As it is, South Africa is now seen as having made a U-turn on the matter and we will have to closely monitor the reaction of the Iranians to the fact." MTN also found itself being threatened in late 2007 by "Long John" for not delivering on its promises. Mbeki's spokesperson, Mukoni Ratshitanga, told the M&G: "Former president Thabo Mbeki does not believe that he should oblige attempts to drag his name into this matter and will therefore not comment."
The Votes: International Atomic Energy Agency and the United Nations
Throughout 2004 and 2005, at the same time that MTN was lobbying hard to displace Turkcell, Iran came under intense pressure over its nuclear enrichment programme. The international community had repeatedly voted against the state before the International Atomic Energy Authority and the UN Security Council, calling on it to meet its obligations under the Nuclear Non-Proliferation Treaty. In fact, as Turkcell detailed, from 2004 to 2008, South Africa largely joined the votes against Iran except for a brief hiatus at the end of 2005 and the beginning of 2006, which coincided with the November 2005 license award. "MTN learned that the Iranians understood South Africa to play a critical role in being able to lead the 'non-aligned' nations on nuclear votes in international bodies," Turkcell stated. And so, Turkcell claims, the cellphone giant orchestrated an "informal" meeting between Mbeki and Iran's nuclear chief, Hassan Rowhani, at a dinner at Mbeki's Cape Town residence. "MTN paid for adviser Rowhani to stay at a hotel in Cape Town, sponsored the large dinner party, and covered all travel logistics," Turkcell claims. "Consistent with MTN's promises, the president assured adviser Rowhani that the South African government would support Iran at the [International Atomic Energy Authority]." But Mbeki, through his spokesperson, refused to comment on this account.
That September, when the International Atomic Energy Authority board found Iran not to be complying with its non-proliferation treaty obligations, South Africa abstained. Come November 20, Turkcell detailed, MTN expected it was to be awarded the licence. Instead, the Iranians are said to have delivered the message that should South Africa vote against Iran at a crucial November 24 vote before the IAEA, it would "cause trouble".
The decision the IAEA has to make was on whether to refer Iran to the UN Security Council for breaching the NPT. This appears to have sent the company's mavericks into a bit of a spin. It is alleged they approached Saloojee, who approached South African ambassador to the IAEA Abdul Minty. Other frantic calls were made, and as it happened, South Africa abstained from the vote. Three days later the Iranians issued the GSM license to MTN.
The M&G was unable to reach Minty on Thursday, but when he was approached on the matter in February, he strenuously denied having been influenced: "At no point did [MTN] approach me to influence me in any direction." According to him, South Africa's policy on Iran at the IAEA had been "very consistent". After being awarded the 49% stake, MTN made good on its promises to its 51% shareholder, carrying all its costs. MTN agreed to pay the IEDC's $88-million capital share of MTN Irancell as well as their share of the $300-million licence fee.
The Iranian partners were clear that they were not willing to pay any "interest" on, or put up security for, a "loan". Charnley presented the proposed arrangement to MTN. Rob Nisbett, the chief financial officer, was apparently shocked at the proposal and refused to permit the deal on "improper and unsecured terms". He insisted that a formal loan agreement be negotiated and entered into with the parties. He also threatened to resign if this was not done.
On November 15 2005 MTN Group directed its subsidiary, MTN International (Mauritius) Ltd, to enter into sham "loan" agreements with the IEDC. Nisbett still voiced concern about this arrangement and informed the executive team that the "loans" put MTN at huge risk. Nhleko issued Nisbett with a formal written warning for opposing the financial terms and was instructed to authorise the transaction. Documents show MTN made the "loans" through a series of complex "round trip" agreements by shifting the funds around between the IEDC, MTN-Irancell, and MTN Group, which it then recorded on its books as loans. By the time the loans were due, MTN-Irancell was highly profitable -- $118-million profit in 2007, $234-million in 2008, $516-million in 2009, $583-million in 2010 and at least $503-million projected for 2011.
Charnley did not respond to numerous messages left on her cellphone and with an assistant in her office. An automatic message at Saloojee's office -- the South African embassy in Oman where he is ambassador -- said staff did not work on Thursdays, and emails were not answered. Spokespeople for Nhleko and Ramaphosa said they would pass on the M&G's respective messages, but neither responded in time for print deadline.
Department of International Affairs and Cooperation spokesperson Clayson Monyela could not be reached, but last month he denied that any company had influence over South Africa's foreign policy. Calls to Iran's embassy in South Africa were placed on hold, after which no calls were answered.
MTN and its legal advisers were locked in all-day meetings yesterday, filing its JSE news service (Sens) announcement only at 5.30pm in response to the explosive claims made by Turkcell in a lawsuit filed in the Washington Federal Court at 2am South African time.
Africa's largest cellphone operator said the claim had still not been served, but that it would oppose it. The company reiterated that there was "no legal merit" to Turkcell's claim and no basis for such a claim to be brought before a United States court. It also noted the South African government's denial of the allegations that MTN exercised influence over it. In advance of Turkcell filing its claim, MTN announced the formation of an independent committee, under the chairmanship of internationally renowned jurist Lord Hoffmann, to investigate Turkcell's allegations. The Hoffmann committee has already begun its investigations and will report its findings to the MTN board, with any recommendations on actions to be taken as a result of its findings, including their publication. "The Hoffmann committee has invited Turkcell to participate in its investigation, but Turkcell has to date not done so," MTN said in the statement. "The invitation remains open to Turkcell to participate in the Hoffmann committee's investigation."
Turkcell has been threatening to take MTN to the US courts for corruption since February 2, but held out for a settlement from MTN first before it filed. MTN has been calling its bluff by refusing to settle out of court, claiming extortion. Turkcell has argued that MTN has many business interests in the US and that the cellphone company has violated the Alien Tort Statute, a 1789 law that gives US courts jurisdiction in some instances to consider claims by foreigners for illegal conduct that occurred in another country. The law is usually cited in human rights and torture cases.
Meanwhile, Turkcell was yesterday dealing with its own set of issues relating to infighting among its board and shareholders. Reuters reported that the board met to discuss its structure and independent board members. Having founded Turkcell in 1994, Mehmet Emin Karamehmet is locked in a boardroom struggle with the other main shareholders in Turkcell: Altimo and Nordic telecommunications group TeliaSonera.
Turkcell's board has seven members. The three main shareholders -- Cukurova, Altimo and TeliaSonera -- each has two seats. Chairperson Colin Williams is the designated independent board member. Altimo and TeliaSonera want him replaced because they say he sides with Cukurova, Reuters reports. TeliaSonera has a 37% stake in Turkcell, whereas Altimo has a 13.2% stake it bought from Karamehmet in 2005. However, Cukurova's 13.8% stake carries controlling rights because of Turkcell's structure.
Source: Mail & Guardian
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