SENS Note - 01 February 2013
MTN -- delivery of report by Independent Committee
Shareholders were 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 USD200 000; and
(d) bribing an Iranian official, Mr Javid Ghorbanoghli, with a payment of USD400 000 to a company called Aristo Oil International Ltd.

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.

Following this year long investigation, the Hoffmann Committee has reported its unanimous findings to the MTN board. The report runs to some 193 pages, together with over 500 pages of appendices, and addresses Turkcell's allegations in detail. In summary, the key findings of the Hoffmann Committee are that:
1. there was no conspiracy between MTN and Iranian officials to remove Turkcell from the successful consortium;
2. there was no promise on the part of MTN to get the South African government to supply defence equipment to Iran or to support Iran's nuclear policy at the IAEA;
3. there were no sham loans to Sairan and the Bonyad;
4. MTN paid nothing to Ambassador Saloojee and neither Mr Phuthuma Nhleko, the then CEO of MTN, nor Mrs Irene Charnley (until March 2007 the MTN director with responsibility for Iran) authorized Mr Kilowan to promise him anything;
5. neither Mr Nhleko nor Mrs Charnley approved a payment which they knew to be intended for Mr Ghorbanoghli. On 4 April 2007 a subsidiary of MTN made a payment of USD400 000 into the personal account of a Mr Mousa Hosseinzadeh, a business partner of Mr Kilowan who had been introduced to him by Mr Ghorbanoghli. The Hoffmann Committee determined that the evidence of both Mr Kilowan and Mr Hosseinzadeh was unreliable, and was thus unable to determine what happened to this money. The payment was made on an invoice from Aristo Oil International Limited, of which Mr Hosseinzadeh is a director, for consultancy services, apparently countersigned by Mr Nhleko, but the Hoffmann Committee found that there is evidence (including expert handwriting analysis) to suggest that Mr Nhleko's signature was a forgery; and
6. consequently, the allegations made by Turkcell against Mr Nhleko, Mrs Charnley and members of the MTN board and senior management, including the chairman, Mr Cyril Ramaphosa, and the current CEO, Mr Sifiso Dabengwa, who were all alleged to be complicit in the actions of Mr Nhleko and Mrs Charnley, are false.

In reaching these findings, following a critical examination of the evidence, the Hoffmann Committee found that Turkcell's allegations are "a fabric of lies, distortions and inventions".

Lord Hoffmann confirmed to the MTN board that he, personally, approved the report and that the committee had received full cooperation from MTN and access to all individuals, information, documents and facilities as were requested by it. Lord Hoffmann further confirmed that neither MTN nor its management had in any way sought to influence the committee in its deliberations or the formulation of the report.

The MTN board is satisfied that Turkcell's allegations have been the subject of a thorough, comprehensive and independent investigation and is satisfied with the findings presented to it.

MTN will continue to vigorously defend the US Proceedings. As noted in the SENS announcement on 15 October 2012, MTN expects the US Proceedings to be disposed of after the US Supreme Court issues its decision in the Kiobel case clarifying the scope of the applicable US law, which is expected to happen by the end of June 2013. MTN reserves its rights to take any legal action consequential on the report, as the MTN board considers appropriate.

The Hoffmann Committee recommended that, subject to legal advice in relation to the US Proceedings, the report be published. In accordance with the recommendation of the Hoffmann Committee, the MTN board has approved the publication of the report, which will be made available on MTN's website in the investors' section at
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