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MTN asks court to dismiss R59bn Turkcell lawsuit

MTN asks court to dismiss R59bn Turkcell lawsuit

MTN has filed a plea, or statement of defence, in its long-running litigation with Turkcell in an attempt to have the $4.2 billion (R59 billion) lawsuit against it thrown out of South African court.

MTN this morning issued a media statement saying that it remains of the view that Turkcell's claim "is opportunistic, an abuse of the process of court, baseless and without merit - we will not be bullied, harassed and oppressed in this matter and have every expectation that we will prevail".

MTN group chief legal counsel, Michael Fleischer, told ITWeb via email that MTN had filed the plea and had "raised certain special pleas".

"If these special pleas are heard upfront and ruled upon in our favour we have asked the court to dismiss Turkcell's claim," he adds.

In June ITWeb reported that the lawsuit over a disputed mobile licence in Iran, would be heard in the South Gauteng High Court. Fleischer says the matter is only likely to be heard at the end of next year or early 2019.

The Turkish mobile operator first sued Johannesburg-based MTN in a US court in 2012, alleging that MTN unlawfully secured an Iranian GSM licence that had been won by Turkcell in 2005. It claims that 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%.

The case was later withdrawn from US courts and filed in South Africa 2013, where it has been caught up in legal wrangling ever since.

"Turkcell was the author of its own misfortune in failing to obtain the licence in Iran," MTN says.

"When it became clear that Turkcell was unwilling or unable to comply with the new legislative requirement that its shareholding in the licence be not greater than 49%, the Iranian authorities offered the opportunity to MTN, which it accepted. Turkcell obviously regretted their decision and has ever since engaged in four different sets of legal proceedings, all of which have been lost.

"Turkcell's implausible allegations rest heavily on a disgruntled former MTN employee who has been described as a fantasist and a conspiracy theorist and whose allegations have been dismissed by an independent investigation as being a fabric of lies, distortions and inventions," MTN says in a statement.

The $4.2 billion claim against MTN is calculated from the profits that Turkcell says it would have made had it operated the Irancell licence. Turkcell is also claiming interest on that amount, from 2005. The claim is made against the MTN group and various MTN companies, as well as Phuthuma Nhleko, MTN's non-executive chairman who was CEO at the time of the Irancell transaction, and former MTN director Irene Charnley.

MTN says the current case in South Africa is the fifth time that Turkcell has attempted to pursue legal proceedings "in respect of substantially the same issues".

"Turkcell continues to pursue its claims only to harass and oppress MTN. We consider that it is most unjust to burden MTN with a fifth round of litigation of substantially the same matters," MTN adds.

"Turkcell's four previous attempts, including proceedings before reputable international arbitration panels, failed. The ongoing attempt to re-litigate complaints that Turkcell have repeatedly litigated without success are contrary to the interests of justice.

"We have every confidence that this fifth 'bite at the cherry' will also fail. The claim smacks of a desperate last measure to try and extract benefits to which it is not entitled," MTN says.

JSE-listed MTN operates in 22 countries in Africa and the Middle East, including Iran. As of 30 June 2017 had 232 million subscribers across its operations.

The Turkcell group operates in nine countries – Turkey, Ukraine, Belarus, Northern Cyprus, Germany, Azerbaijan, Kazakhstan, Georgia, and Moldova – and is listed on both the New York Stock Exchange (NYSE) and the Borsa Istanbul (BIST).


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