MTN's bid to sway govt raises disturbing questions
Although an MTN-commissioned investigation has ostensibly cleared the company of wrongdoing in Iran, its report is replete with examples of how MTN's well-connected executives intervened to influence South African diplomacy in its favour.
MTN stands accused in a US court of bribing South African and Iranian officials and politicians and of trading on influence to secure defence contracts between the two countries and to affect South Africa's position on Iran's nuclear programme.
Allegedly, this was so MTN would win a lucrative mobile licence there.
Some of the evidence presented by retired British judge Leonard Hoffmann and his three-person committee is as follows:
- Former MTN group commercial director Irene Charnley wrote anxiously to then-president Thabo Mbeki in 2004 to ask him to intervene in Iran in the company's favour.
- Charnley then lobbied former South African defence minister Mosiuoa Lekota, and he jetted off to negotiate with politicians in Tehran, with Charnley and MTN's then chief executive Phuthuma Nhleko in tow.
- MTN paid to accommodate a team of Iranian nuclear negotiators when they visited Cape Town for a meeting with Mbeki in 2004.
- Despite Hoffmann's conclusion that there was "no promise" by MTN to "procure the South African government to supply defence equipment or support Iran's nuclear policy at the International Atomic Energy Agency", MTN's Iranian contract was frank on this matter: "The co-operation between MTN and Iranian shareholders should be in the line of defensive security and political co-operation. MTN shall fully support co-operation regarding the aforementioned issue in South Africa."
Whether MTN's lobbying in fact influenced South Africa's policies on Iran is arguable, but MTN's efforts and subsequent events raise disturbing questions over the extent to which the South African government policies can be manipulated in the interest of well-connected businesses.
The South African Department of International Relations and Co-operation has maintained that policies were not influenced.
Military linked organisations
MTN enlisted the Hoffmann commission early last year to investigate allegations by Turkcell, a rival phone company. Turkcell was initially awarded the Iranian mobile licence early in 2004, but it was replaced late the next year with MTN.
Turkcell is suing MTN in the United States District Court of Columbia in Washington DC. The core of the allegations is based on testimony by MTN's former Iran office manager, Chris Kilowan.
Kilowan said MTN conspired with Iranian officials and politicians to oust Turkcell in Irancell, the winning consortium that included two Iranian military linked organisations: Sairan and the Bonyads.
In the process, Kilowan said, the company promised Iran it would deliver arms-trading agreements with South Africa and influence the latter's position on Iran's nuclear programme. The company also bribed an Iranian politician and the South African ambassador to Iran, Yusuf Saloojee, he said.
Hoffmann has rejected Kilowan's claims as "a fabric of lies, distortions and inventions".
Be that as it may, the evidence the retired judge presents constructs a disturbing narrative. He reports that Charnley first wrote to Mbeki, "whom she knew from her days as an ANC activist", in June 2004, after Turkcell ran into political resistance following its licence award – Iranian politicians were concerned that Turkey and Israel's apparently friendly relationship presented a security risk.
Charnley "anxiously" pleaded with Mbeki for presidential favour: "We believe an intervention from your office could spur the Iranian ministry of information technology and communications to initiate negotiations with us on the licence agreement."
After visiting Iran, where the importance of a defence partnership was emphasised, Charnley then petitioned Lekota, "whom she had also known through the ANC".
Iran could well award the licence to MTN, she wrote: "We believe it would be very helpful if enquiries could be raised with the relevant Iranian authorities on their expectation for an appropriate bilateral trade deal for them to award the second GSM [global system for mobile communications] licence to MTN."
Within one week, Lekota appeared to have booked his trip to Tehran, where he and his counterpart discussed future defence co-operation.
The two countries enjoyed various negotiations over the next few months, including a bilateral commission in Tehran where "possible defence co-operation" was discussed and MTN's newly established Tehran office was publicly punted.
In September, when MTN negotiations were at a critical point, South Africa abstained from an International Atomic Energy Agency vote, saying that Iran had failed to comply with its non-proliferation treaty commitments.
Following another agency meeting in November, discussing the same issue, South Africa again favoured Iran, saying that it should be given more time. The next day, Iran awarded the mobile licence to MTN.
According to Kilowan's evidence, MTN had been told by an Iranian official that the licence would only be awarded if South Africa favoured Iran before the atomic energy vote – Hoffmann rejected this as a fabrication. His view was that MTN's lobbying of the South African government was normal business.