Independent Special Committee chaired by Lord Hoffmann delivers its report to the MTN Board
Shareholders are referred to the SENS announcement by MTN on 29 March 2012 (as read with the earlier announcement of 2 February 2012) in which they were advised that Turkcell Iletisim Hizmetleri AS (Turkcell) and its subsidiary, East Asian Consortium (EAC), had instituted a claim against MTN and its subsidiary, MTN International (Mauritius) Ltd in the US District Court in Washington DC arising out of EAC's unsuccessful effort to obtain the 2nd GSM Licence in Iran during 2005 (US Proceedings).
In these proceedings, Turkcell alleged that MTN had conspired with Iranian officials to oust Turkcell from the successful consortium and take its place by: (a) promising to use its influence with the South African government to procure the supply of defence equipment to Iran and to support the Iranian nuclear development programme at meetings of the International Atomic Energy Agency (IAEA); (b) bribing two Iranian public bodies (Sairan and the Bonyad) with payments disguised as sham loans; (c) bribing the then South African ambassador to Iran, Mr Yusuf Saloojee, with a payment of US$200,000; and (d) bribing an Iranian official, Mr Javid Ghorbanoghli, with a payment of US$400,000 to a company called Aristo Oil International Limited.
These claims were based on the allegations of Mr Christian Kilowan, a former employee of the MTN group, who was involved in its operations in Iran from August 2004 to November 2007.
The MTN Board of Directors (MTN Board) stated its belief that the claims in the US Proceedings lacked legal merit and launched a motion to dismiss the claims. However, in the light of the serious nature of the factual allegations and the company's zero tolerance for corruption, the MTN Board established a special committee (Hoffmann Committee) consisting of an external chairman and non-executive directors to take all actions the committee deemed appropriate to investigate the Turkcell allegations. To ensure the integrity and independence of the investigation, the MTN Board appointed Lord Leonard Hoffmann, an internationally renowned jurist and former UK House of Lords judge, as the chairman.
The Hoffmann Committee undertook a thorough examination of Turkcell's allegations, which included an extensive collection and review of electronic and documentary records, including those relied on by Turkcell, and a consideration of all available evidence, including the evidence of current and former MTN employees as well as current and former South African and Iranian officials, the testimony of Mr Kilowan in the US Proceedings and several expert reports commissioned by the Hoffmann Committee.