Fin24

MTN exec admits to bribe

2012-06-03 10:50

Johannesburg - A senior former MTN Group [JSE:MTN] executive has admitted to bribing South Africa’s former ambassador to Iran to thank him for assisting the mobile giant.

City Press has obtained a transcript of Chris Kilowan’s evidence before a US court a month ago in which he implicates himself and top MTN executives in underhanded dealings to acquire a multibillion-dollar mobile licence in the pariah state.

In a chilling account of events before the Columbia District Court, Kilowan testified for Turkish cellphone company Turkcell in its $4.2bn (R36bn) lawsuit against MTN – South Africa’s fifth-biggest company – for “stealing” its ­Iranian mobile licence.

In his evidence, Kilowan testified under oath that:

  • Irene Charnley, MTN’s former head of North African and Middle East operations, approved a bribe payment to Yusuf “Jojo” Saloojee, South Africa’s former ambassador to Iran, for his assistance in acquiring the licence;
  • He had to pay the $200 000 bribe to Saloojee himself because the ambassador urgently needed the money to buy a house in Pretoria and Charnley had left MTN at the time;
  • He shook hands with Saloojee after making the deal and the ambassador promised he would pay back the money as soon as he had received payment from MTN; and
  • Despite numerous attempts to reclaim the money from MTN and its former chief executive Phuthuma Nhleko, the company has to date refused to reimburse Kilowan.

Yesterday, Charnley and Saloojee denied they were involved in a corrupt deal.

Charnley said: “I have never participated in any form of bribery, of anyone, on any matter. I am not aware that any bribery took place and I wouldn’t have tolerated it had I been aware of any bribery.”

She said Kilowan’s admission that he had paid Saloojee from his own bank account “seems to me that he has confessed to committing a crime”.

Saloojee responded: “I did not receive any bribe money from ­anyone, including MTN.”

Nhleko didn’t respond to questions, and MTN accused Kilowan of being an “unreliable” witness and a “disgruntled” ex-employee (See full response on Page 2).

Kilowan was dispatched by MTN to Iran in 2004 to scout for a third network licence after the second licence was awarded to Turkcell by the Iranian government.

However, the second licence was controversially taken away from the Turks and given to MTN, which had initially lost out to Turkcell.

In his deposition to the US court, Kilowan also claimed he and his family’s lives were at risk and they were being followed by MTN spies.

On his recent visit to the US, Kilowan testified, he was approached by two private investigators, who said they were working for MTN’s lawyers and wanted to talk to him about his deposition.

“MTN has done everything in its power to discredit me, to put the safety of my family at risk, to put my own safety at risk, to make allegations against me that are totally unfounded. And quite frankly, I am severely angry with MTN,” Kilowan testified.

His former business partners are being contacted, his current business partners are cancelling deals with him and his family is in hiding, Kilowan testified.

He began his evidence by describing his relationship with Charnley, who he had met in 1992 or 1993 when she worked for the National Union of Mineworkers. He was working for chemicals company AECI [JSE:AFE].

Charnley later recruited him to work for MTN.

She is well connected in the ANC and is a business partner of former president Thabo Mbeki’s wife, Zanele, Kilowan said.

After successfully securing the Iranian deal for MTN, Kilowan and Charnley discussed remunerating those who had assisted the firm to clinch the deal.

It was at a dinner with Saloojee that the ambassador allegedly asked for money.

According to ­Kilowan, he said: “Look, I’m thinking of, at the end of my posting in Iran, of not taking another posting.

“So I want to . . . buy a house in Pretoria, and I want to send my wife and daughters to South Africa so that they can return at the beginning of the school term.”

Saloojee continued: “Can you ask Irene – they have offered me something last year, and I said no, but can you ask Irene as to whether they would be prepared to give me money to buy the house.”

According to Kilowan, he communicated that to Charnley, who responded: “Yeah, no problem. How much is it?”

An amount of R1.4m was apparently agreed on and Charnley asked for a contract to be finalised.

Shortly thereafter, in April 2007, Charnley left the company and Kilowan made the arrangement with Saloojee to pay him from his personal bank account.

Saloojee agreed to reimburse him later with the money he was due to receive from MTN.

During a visit to Iran, Saloojee allegedly thanked Nhleko for the payment.

“So after that, Phuthuma asked me what is it that he thanked me about? I (Kilowan) said, ‘Well, you ­remember that we agreed that we are going to pay him some money, and I made that payment already’. Phuthuma said, ‘Well, you know, Irene should not have given you permission to do it, but okay, it’s done now. Let’s do a contract for him’.”

Despite his and Saloojee’s attempts to reclaim the bribe money from Nhleko, the former MTN chief executive failed to pay up.

At the beginning for 2011, former Auditor-General Shauket Fakie, who now works for MTN, called Kilowan and told him Nhleko wanted to finalise the matter.

Fakie allegedly told Kilowan that Nhleko “doesn’t recall that he agreed to pay anybody”.

When Kilowan showed them a memorandum signed by Nhleko in 2006, Fakie said: “Phuthuma now recognises that he did sign an authorisation, but he didn’t sign any authorisation for Ambassador Saloojee.”

City Press has seen a copy of the memorandum from Nhleko to Charnley, which states: “With reference to the process in terms of which MTN . . . acquired a 49% equity interest in Irancell, you are authorised to finalise all agreements with the consultants that assisted the company during the run-up to and actual negotiating period, and to effect the necessary payments.”

Kilowan told Fakie that he drew up the memorandum Nhleko signed, specifically to make provision for the Saloojee payment.

Fakie phoned back. “Look, Phuthuma now agrees that he did have (a meeting with Saloojee about the payment) and that he did make this commitment (to repay Kilowan), but now it is too late and too long after the event, and he doesn’t know how he’s going to pay this money.

“So he is very sorry but he’s not going to pay me the money,” Kilowan testified.

Kilowan also pursued Charnley for the money. She allegedly promised to pay him half the amount, but never obliged. 

Comments
  • ianon.ym - 2012-06-03 11:00

    You doing SOUTH AFRICA proud - thank you MTN

  • Booswig - 2012-06-03 11:17

    Bribery and Corruption. Proudly South African!

  • Vic - 2012-06-03 11:19

    Denial, denial, denial! So I guess MTN won't be lowering call rates anytime soon, in case they have to pay the lawsuit of R 36 billion to Turkcell.

  • Garth - 2012-06-03 12:20

    Just waiting for 2 months till contract expires and then changing networks! Not supporting corruption!!

  • Anakin - 2012-06-03 13:55

    MTN, before RICA : "You already have a 10MB data bundle" WOW MAN, what a progressive corrupt company. Even now they still can't match the 8ta deals. The exec are all in for themselves, again: inside bribes and deals, while selling expensive data to it's subscribers. If I use 200MB/day then only 8ta works for me...catch a wakeup MTN.

  • Gerald - 2012-06-03 14:20

    Sounds like that very Kilowan hates the sour grapes of his failed extortion on MTN. I mean, how could he think theyd pay him R2Million when they never pay us all our R1000s on overran contracts, zapped airtimes, stupid 3G, and what not else.

  • Eugene De Wee - 2012-06-03 14:35

    Another sad saga for South Africa.

  • Andile - 2012-06-03 14:50

    Wow!! Only 13 comments to this article. News24 commentators should be having a field day criticising but NO its not happening. Why? I ask myself. Could it be that the article is not targeting the people that news24 readers looove to criticise. Either way I think this has everything to do with the fact that the implicated individuals do not fall within the..... Population

      Roulon du Toit - 2012-06-04 11:45

      Ridiculous comment from your side. What is the point you are trying to make?

  • andrevanvuuren - 2012-06-03 15:25

    To all those that have commented on this article and now deem MTN to be guilty of corruption, please be so kind as to indicate how you arrive at the conclusion that MTN is guilty of paying a bribe, and thus corruption. The article consists largely of allegations made by a former employee with those accused denying the accusations - no where is there proof that anything untoward took place. Additionally, the headline to this article should have ascribed the comments to an ex-MTN employee, and not have been headed, "MTN exec admits to bribe" - this is purely rank bad journalism on the part of News 24 once again! The spurious allegations also make no sense, as why would a bribe be paid to the South African ambassador, and not to an Iranian official instead? Also, when on considers what is at stake here, US$200 000 is hardly worth the effort! For the record, I have no personal connection with MTN!

  • nananatakemehome - 2012-06-03 19:21

    How did Kilowan use his own money to pay and expect the company to 're-imburse' what is clearly an illegal act. Kilowan is either stupid, or he thinks he can put this on MTN, if he was involved with 'seducing' officials out there with his own money, he cannot come and claim that his private individual acts of irresponsibility amount to 'company policy'. These allegations are scurrilous, we need more than 'good faith' in this guy we need the paper trail. Pure and simple.

  • tshepo.ally - 2012-06-04 02:01

    not sure Kilowan did the wisest thing there. that's quite prejudicaial to all parties involved (including MTN itself). however, it's business. most businesses are assisted by corruption. it all depends on how good you are in hiding it, and subsequently not relying on it. quite disappointed by MTN, but that's the world of business. US$4bn is a bloody lot of money. gonna be a huge gap in their balance sheet if Irancell succeeds with the lawsuit - of which is likely to happen.

  • fred.fraser.12 - 2012-06-04 02:15

    Never liked this company. I remember reading an interview with one of their CEO's. I was shocked at the total lack of honesty and integrity. Not at all surprised this has happened. South Africans should vote with their feet, turn off the energy to it.

  • fred.fraser.12 - 2012-06-04 04:00

    Never liked this company. I remember reading an interview with one of their CEO's. I was shocked at the total lack of honesty and integrity. Not at all surprised this has happened. South Africans should vote with their feet, turn off the energy to this company and group of non-leaders.

  • Ryno - 2012-06-05 08:05

    everywhere you corrupt - MTN

  • bheki.dingiswayo - 2012-06-05 16:20

    I do not see any corruption on part of MTN but on Kilowan. I have never heard that the company expenses are paid by individual employee out of his pocket. If this was from MTN they would have paid him first as salary and he would transfer the money to the ambassador- Cash???????. Another possibility will be that they we loaning each other money-Kilowan and Salojee

  • pmalungana - 2012-06-06 09:35

    This is a graft ever. I hope they find a way to resolve it. R36 billion I will never lay my hand on it until I die.That is as cedrtain as death itself.

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