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UPDATE 1-Turkcell files suit against MTN over Iran licence
March 29, 2012 / 4:10 PM / 5 years ago

UPDATE 1-Turkcell files suit against MTN over Iran licence

* Turkcell confirms suit filed in U.S. court

* MTN says claim is for at least $4.2 billion (Recasts with amount, adds background)

JOHANNESBURG, March 29 (Reuters) - Turkish mobile operator Turkcell on Thursday filed a suit against rival MTN Group of South Africa over the award of a 2004 cellular licence in Iran, a case that could cost MTN $4.2 billion in damages.

Johannesburg-based MTN said last month it faced a suit from Turkcell claiming it won the licence by lobbying South Africa to back Tehran’s nuclear development and by bribing officials of both governments.

MTN gets nearly 10 percent of its annual revenue from Iran, where it has a 45 percent market share.

Turkcell confirmed on Thursday it had filed the lawsuit in a U.S. court, because it believed MTN had breached international law.

“Newly received information by Turkcell indicates that the signing of the licence agreement with MTN instead of our company was a consequence of MTN’s actions,” Turkcell said in a statement.

“In light of the harm caused by MTN’s actions to both Turkcell and to its shareholders, Turkcell today filed a lawsuit against MTN seeking the compensation of such damages.”

However, the Turkish firm gave few details about the case.

In a separate statement, MTN said the claim was for at least $4.2 billion. MTN has dismissed the allegations as having no legal merit.

South Africa has said its foreign policy is independent and denied it had been pressured by the telecom company into backing Tehran’s nuclear programme and aiding its military.

Turkcell said on Thursday it had been conducting settlement talks with MTN, but said the South African company terminated those discussions via a public statement this month.

MTN this month accused Turkcell of using the threat of a lawsuit to extort money and said the Turkish company was not cooperating with an independent panel to investigate the case.

Iran is increasingly becoming a headache for Africa’s largest mobile operator.

The company said this month it was struggling to get its money out of Iran due to tougher Western sanctions, and was looking for ways to swap cash with companies that need to move payments in.

Iran is facing unprecedented economic pain from expanding oil and financial sanctions over its nuclear programme. Tehran denies suspicions that its uranium enrichment work is for weapons, saying it is for peaceful purposes only. (Reporting by David Dolan; Editing by Pascal Fletcher)

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