MTN’s Liberia partner: Collusion claims
Cape Town - Telecommunications giant MTN is caught up in allegations that its joint venture partner in Liberia is a financial vehicle for convicted warlord Charles Taylor’s wealth.
Benoni Urey, the chairperson of MTN’s partner in Liberian telecommunications company Lonestar Cell MTN, is named in the UN as an accomplice of war criminal and former Liberian president Taylor.
Last week the UN Security Council announced the delisting of a number of former Taylor allies from its assets-freeze and travel-ban list.
The UN, however, did not take Urey’s name off the list.
He is named in a report on Liberia compiled by a UN panel of experts, which looked into a range of human rights violations in the 14-year civil war, famed for the conscription of thousands of child soldiers, that ravaged Liberia.
The men at the centre of this new Liberian saga are Emmanuel Shaw and Benoni Urey, shareholders and partners in PLC Investment Limited, a company that has a 40% stake in Lonestar Cell MTN.
The UN has withdrawn its travel ban and asset freeze on Shaw.
Lonestar Cell MTN told City Press that the travel bans had been in place for several years and these did not affect MTN’s relationship with these sanctioned individuals.
The statement said such bans did not affect Lonestar Cell MTN.
PLC owns 40% of Lonestar Cell MTN, while 60% of the company is held by MTN Group through its Dubai-based subsidiary, Investcom.
According to the New York Times, PLC has been asked by the UN to submit its shareholding structure and open its books to the UN investigators on suspicion that the company is a financial lifeline for Taylor.
It is reported that PLC has continuously refused to provide the UN with the requested documents.
The UN panel of experts recently reported that Taylor’s ownership of PLC could be 40% – and that in this way Taylor indirectly has a stake in Lonestar Cell MTN.
The company has been operating in Liberia for 10 years. It has 48% market share and is the leading cellular phone network in Liberia.
Market penetration in the country stands at an estimated 45%, which means there is room for further growth for Lonestar Cell MTN.
Liberia is the second-lowest revenue contributor to MTN’s balance sheet in the lucrative West African region, led by MTN Nigeria and MTN Ghana.
Urey and his political profile have been of concern to MTN Group Limited [JSE:MTN].
MTN’s chief risk and governance executive, former South African auditor-general Shauket Fakie, and Ahmad Farroukh, MTN’s vice-president for West, East and Central Africa wrote a letter of concern to him last year.
In the letter, dated November 16 2011, they wrote: “We would like to express our concern on recent developments which are causing fundamental reputational damage to Lonestar Communications Corporation, or Lonestar Company.
“All directors of Lonestar have a fiduciary duty to act in the interests of the company (and accordingly not cause reputational damage to the company).”
The letter points to Urey’s political involvement as the major concern.
It says that MTN recognises Urey’s “right to freedom of political association . . . However, there are limitations to the manner in which that right can be exercised.”
MTN denies media reports from Monrovia that the company is involved in attempts to buy Urey out of the company.
MTN spokesperson Xolisa Vapi said: “To our knowledge, MTN is not under scrutiny concerning its partnership with Lonestar.”
However, Vapi confirmed that Urey was chairman of Lonestar Cell MTN and that Shaw was a director of the Monrovia-based company.
Laurence Bropleh, head of communications at Lonestar in Monrovia, told City Press that the letter “has no current-day relevance”.