Police have arrested Yusuf Saloojee, a former South African ambassador to Iran, on corruption charges related to the awarding of a cellphone licence to MTN after it was initially given to Turkcell Iletisim Hizmetleri.
The case has been the subject of legal claims for several years by the Turkish company, which accuses MTN of paying bribes to South African and Iranian officials to secure 49% of Irancell Telecommunication Services Co in 2005, which gave it a licence to operate in the country.
MTN has always denied the charges.
Saloojee, 75, was seized by the Hawks over allegations that he facilitated the cancellation by the Iranian government of the Turkcell licence, which was then awarded to MTN. Saloojee, now retired, is accused of earning R1.4m for his role in the process. The money was allegedly used to buy a house in Pretoria, the Hawks say.
"MTN has consistently denied that there is any credible evidence that it promised Ambassador Saloojee any money, or that Ambassador Saloojee accepted money from MTN," MTN said in response to questions.
"The allegations against MTN and Ambassador Saloojee appear to be based on the evidence of a single witness, Mr Chris Kilowan, a disgruntled former employee of MTN."
The ex-ambassador's arrest may have implications for the outcome of Turkcell's latest attempt to sue MTN, which was filed in the high court in Johannesburg in 2017. The Istanbul-based company is demanding $4.2bn (R59bn) in damages, based on profit Turkcell says it could have made had it been able to keep the licence, plus interest.
MTN shares reversed gains and traded 1.8% lower at R84.50 at the JSE's close, valuing the company at R161bn. The stock has slumped more than 34% over the past 12 months.
Iran is MTN's second-biggest market, with about 44.5-million subscribers. The country has been a thorn in the carrier's side of late, as US-led sanctions prevent it from repatriating funds from there.
Turkcell first sued MTN in the US in 2012, but had to withdraw the claim after the US Supreme Court ruled that it couldn't be heard in the country. The case was filed in SA in 2013, but was delayed following objections by MTN and subsequent amendments.
Saloojee was granted bail by the Johannesburg Specialised Commercial Crimes Court and his case will be heard on April 17.
MTN is also facing legal claims in Nigeria, its biggest market, over the alleged nonpayment of $2bn of back taxes - and the head of MTN's Uganda division was deported on Thursday.
Uganda deported the Belgian head of MTN's local branch, making him the fourth employee to be kicked out of the country this year. Police spokesperson Fred Enanga said Wim Vanhelleputte had been deported "over national security".
In a statement issued on Friday, MTN confirmed the deportation but said the company was not aware of the reasons for the move. - Bloomberg and AFP..