MTN sued for $4bn over Iran contract

Turkish cellphone operator Turkcell has filed a $4.2-billion (R32.45-billion) lawsuit in a US court against MTN over alleged corruption in a deal in Iran, the companies said yesterday.

Turkcell said that it had filed the lawsuit in a US federal court in Washington, accusing MTN of violating international law.

MTN said separately that the case could seek up to $4.2-billion in damages.

Turkcell said that it was awarded Iran's first private GSM license in 2004 through an international tender.

"Subsequently Turkcell was barred from concluding its license arrangement, and Iran entered into a license agreement with the South Africa-based operator MTN, instead of Turkcell," it said.

MTN owns a 49% stake in the Iranian cellphone company Irancell, which holds the operating licence in that country.

MTN's 33 million customers in Iran make up 21% of its total subscriber base.

Turkcell did not disclose the details of its lawsuit, but has previously accused MTN of bribing government officials and pressing the South Africa government to endorse Iran's nuclear programme in exchange for rights to the GSM licence.

"MTN continues to believe that there is no legal merit to Turkcell's claim and no basis for such claim to be brought before a US court," the South African firm said.

"MTN will accordingly oppose the claim. MTN further notes the South African government's denial of the allegations that MTN exercised influence over it."

The Turkcell dispute comes as the US is pressuring allies to cut business ties with Tehran.