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MTN exec admits to bribe

Jun 03 2012 10:50 City Press

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MTN GROUP LIMITED [JSE:MTN]

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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. 

mtn group  |  turkcell  |  iran  |  corruption
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