9 hours ago
MTN hits back at US congresswoman's accusations of complicity in terror financing
A fresh volley has been fired at the MTN Group from the US, and this time it comes with congressional weight and accusations that go all the way up to the Union Buildings.
Congresswoman Elise Stefanik, House Republican Conference Chair, has written to Bank of New York Mellon (BNY Mellon), calling for a sweeping investigation into the bank's relationship with MTN, citing 'deeply troubling and well-documented concerns' about the telecom giant's links to Iran, Hamas and, somehow, Cyril Ramaphosa's wallet.
Stefanik's four-pronged call to action includes asking BNY Mellon to halt its role as MTN's American Depository Receipt (ADR) sponsor, cooperate with US authorities investigating MTN's alleged violations of sanctions, and 'review and disclose' the full extent of its involvement with MTN and its Iranian affiliates.
Her letter singles out a pending lawsuit in the Eastern District of New York, Zobay v MTN, which accuses the company of financing terrorism under the US Anti-Terrorism Act. Stefanik claims 'significant legal precedent confirming MTN's complicity' already exists — which MTN flatly rejects.
MTN hits back
MTN's chief sustainability and corporate affairs officer, Nompilo Morafo, said: 'So yes, since 2011, our process of issuance and cancellations of ADRs has always been held by the Bank of New York Mellon. They hold about 0.3% of MTN Group's total issued capital at this point of the ADRs.'
Morafo said Stefanik's claims about the Zobay case were 'incorrect' and 'not factual,' pointing out that 'the anti-terrorism case of MTN at this point is at the stage where parties have exchanged evidence and the factual allegations have not been tested in court'.
The company's official holding statement adds that 'The New York court has not confirmed MTN Group's complicity in anything and no final ruling has been made on the matter.' The statement also expresses 'deep sympathy for those who have been injured or lost loved ones as a result of the tragic conflicts in Iraq and Afghanistan'.
'No operational control' in Iran
Morafo also refuted the allegations against Ramaphosa, who chaired MTN two decades ago (the chairperson is a non-executive role).
'The current South African President served as the chairman of MTN Group 20 years ago. He resigned from the directorship in May 2013. Any suggestions that he improperly benefited from his time at MTN are false in our view and misleading,' said Morafo.
And Iran? Morafo insisted MTN has a hands-off role in that country.
'The fact of the matter is that we are minority shareholders [41%] of Irancell. We don't have operating control,' she said.
The holding statement backs her up: 'Since the new sanctions regime was implemented [in 2018], we have not deployed any capital into the business and have not extracted capital or dividends.'
Fighting on home soil
The Zobay litigation — first filed in 2022 — continues to crawl through the US court system. While the court has allowed it to proceed, the substance of the claims remains sealed, and no judicial ruling has yet linked MTN to terror financing.
That, however, hasn't stopped US legislators from leaning on reputational pressure points like BNY Mellon to sever ties.
MTN, for its part, says it is 'committed to respecting and protecting human rights' and that its strategy is to 'lead digital solutions for Africa's progress'. In 2020, the company board declared it would 'simplify its portfolio' and focus on its pan-African strategy.
There's also the Turkcell litigation being heard in South African courts to keep an eye on. DM
